FBR proposes new procedure for inclusion in Active Taxpayers List

FBR, the tax authority has issued a draft of further amendments to the Income Tax Rules, 2002, proposing changes to the existing mechanism for inclusion in the ATL.Under the proposed procedure, an individual who files an income tax return for the latest tax year after the prescribed or extended deadline could qualify for inclusion in the Active Taxpayers List without payment of the applicable surcharge, subject to fulfilment of specified conditions.

The proposed mechanism requires the taxpayer to submit an undertaking through the Iris system using the prescribed ATL Form under sub-section (3) of Section 182A of the Income Tax Ordinance., a person who files the latest tax year's income tax return after the due or extended date and submits the required undertaking through Iris may have their name included in the ATL without paying the surcharge.

The proposed changes are aimed at providing a mechanism for taxpayers who miss the prescribed filing deadline but subsequently fulfil the required tax return and declaration requirements. The FBR has invited objections and suggestions from stakeholders regarding the proposed amendments.

Such feedback can be submitted to the board within seven days of publication of the notification in the official Gazette. The proposed amendments form part of the FBR's efforts to revise tax administration procedures and provide greater clarity regarding the status of taxpayers who file returns after the statutory or extended deadline.

The Active Taxpayers List is an important component of Pakistan's tax system, as ATL status can affect the rate of withholding taxes applicable to individuals and businesses on various transactions. The final procedure, however, will depend on the amendments approved and formally notified by the FBR after considering feedback received from stakeholders.