Daily Times

KARACHI: Tax professionals have requested the Federal Board of Revenue (FBR) to delete the section requiring non-resident Pakistanis to file returns in the recently proposed draft income tax return form, saying it is against the law.

Karachi Tax Bar Association (KTBA) President Khalid Mahmood Wednesday said that non-resident Pakistanis were not required to file income returns unless they earn in Pakistan. “However, the draft return form contains a new section for non-resident Pakistanis. As per section 114(1), there is no requirement for non-residents to file any return if there is no income.”

The KTBA made certain observations while reviewing the draft return form and pointed out that the form was being made available only for individuals and AOPs but not for companies and hence companies with special tax year would not be able to review their return forms for filing.

“At the time of filing wealth statement, the Integrated Risk Information System (IRIS) asks for a town code, which is neither available nor defined in the draft form. Furthermore, the town system does not exist in Karachi anymore and since last quarter of 2013, Karachi has been divided into district municipal corporations, thus it is suggested that system should have comprehensive list of areas facilitating taxpayer to select relevant areas in their respective cases.”

The tax body said in wealth reconciliation statement under the head “Other” appearing in both the “Inflows” and “Outflows”, a separate description box should be added. “This will not only facilitate taxpayers but will also be helpful in preventing unnecessary notices by officers.”

Moreover, “under the Salary Return Form, the field for tax deducted U/s 149 is not available”. “This anomaly is found in the IRIS. The draft return on the IRIS is also not computing tax payable on salary.”

The KTBA noted that only account number was printed on wealth statement and other information such as bank name, branch name and address was not printed, creating problems for taxpayers as well as for the department. “It is suggested to remove this anomaly,” the KTBA added.

In a letter to the FBR Chairperson Rukhsana Yasmin, KTBA President suggested that instructions given in the last of the return form need to be updated as per the law.

“Also, a senior citizen’s rebate is not being calculated on IRIS while on the payment side it has been observed with concern that the codes of banks and their branches are available at very limited number, which compels a taxpayer to put the code of the main branch of the bank. This anomaly can easily be addressed if the data of codes of banks and their branches is sought from the Pakistan Banks Association and made available,” it added.

The KTBA added that “Page-Wise Import” feature might be enabled so that taxpayer could select only the required data. “This will certainly reduce filling of return form considerably.”

The KTBA went on to say that the system should automatically facilitate generation of refund application under section 170 in the prescribed manner.

“Moreover, introduction of various forms also creates problem for taxpayers and requires intervention of their consultants.”

Published in Daily Times, August  2^nd 2018.