ISLAMABAD: The National Assembly Standing Committee on Finance has opposed an FBR proposal to penalize late tax filers and directed that the amendment to the Income Tax Ordinance 2001 be redrafted.
The committee recommended reducing the penalty period for not filing tax returns to three months. It rejected the FBR’s proposal to introduce a new definition of tax payment for non-filers.
Committee members said a penalty for non-filing of returns is not appropriate. “If someone cannot file returns due to illness or death, it will be a problem for them,” members said. “It is not right to impose a penalty for non-filing of tax returns in the first place.”
According to an FBR member, amendments are proposed to Section 182 of the Income Tax Ordinance 2001. Under the new calculation, tax payable on taxable income or the highest tax paid in the last three years would be applicable. The FBR member said the highest tax paid in three years would become part of the new calculation.
FBR officials told the committee that laws related to filers and non-filers are proposed to be made stricter. Heavy penalties will be imposed on those who do not comply with FBR notices. A penalty of Rs1 million is proposed for the first violation. For repeated violations, the penalty is proposed to be increased to up to Rs2 million, officials said.
Officials added that action will be taken against those who do not provide information despite being summoned by the Board. New administrative powers are proposed to ensure compliance with tax laws.
