ISLAMABAD: The government has issued notices to nearly 800,000 taxpayers who failed to file their income tax returns before Dec 8 deadline for the tax year 2020.

Unprecedented from the past practices, top officials of the Federal Board of Revenue took the exceptional decision of penalising taxpayers, who not only exist on the tax rolls but also filed returns regularly in the past years.

The notices were served to the taxpayers via the e-filing system IRIS.

In its first year of government, the PTI government received record good numbers of returns for tax year 2018 after it extended the filing date until August 9, 2019, from Sept 30, 2018.

For the tax year 2019, the last date was originally set at Sept 30, 2019 which was further extended until Feb 28. The PML-N and PPP governments also facilitated taxpayers by extending the last date at least until Dec 31 in their respective tenures.

The FBR received 1.882 million returns till Wednesday as against 1.91m last year, showing that 28,354 did not file their returns. For tax year 2019, the total number of returns filed were 2.9m, which was achieved because of the extension of the last date until Feb 28, 2020.

According to the FBR data, over 300,000 taxpayers have sought extension in the filing of date before Dec 8, 2020, which was the last date. These people were given an additional time of 15 days to file their returns and to avoid the proposed penalty.

The penalty for non-filing of income tax return is Rs40,000.

Former finance minister Dr Miftah Ismail told Dawn that this was poor decision making of the FBR top management for not extending the last date to accommodate people amid the spread of coronavirus in the country. He went on to say that there was no harm in extending the last date until the end of the current month.

The FBR gradually extend the last dates for filing of income tax returns in the last few years. The current regime extended the last date in one go for two months, he said, adding it shows the poor administrative skills of the top management of the FBR.

The tax machinery notified a simplified income tax return form and wealth statement for individuals and associations of persons having a turnover of less than Rs50m as manufacturers for the tax year 2020.

Dr Ikram ul Haq told Dawn that these forms were notified on Dec 9 — one day after the deadline for the filing of tax returns for the tax year 2020. He noted that these forms should have been notified much earlier than the deadline in case the government was not willing to extend the date.

Those manufacturers, who submitted their returns before the deadline with full disclosure, while those who secured extension will be doing partial disclosure, he said, adding that “this is against the law.”

He said that there are more than 4m commercial connections. The FBR needs to work on these commercial users to bring into the tax net instead of chasing the salaried class.

Meanwhile, FBR spokesperson Nadeem Rizvi said that non-filers were required to file extension applications within the due date. All extension applications have been accepted by extending the date in such cases till December 24, he added.

A former chairman of the FBR, who is not willing to be named, told Dawn that he will take up the issue with Prime Minister Imran Khan. He went on to say that the Covid-19 pandemic has led to extraordinary circumstances in Pakistan. The government should consider the problems of taxpayers who are either in isolation or taking extra care to combat the virus, he added.

Published in Dawn, December 17th, 2020