FBR proposes new procedure for inclusion in Active Taxpayers List

The Federal Board of Revenue (FBR) has introduced a new process for including taxpayers in the Active Taxpayers List (ATL), enabling certain individuals who submit their latest income tax returns after the due date to be added without having to pay a surcharge.

As per the documents released by the FBR, the tax authority has presented a draft of additional amendments to the Income Tax Rules, 2002, which suggest modifications to the current process for being included in the ATL.

According to the proposed procedure, an individual who files their income tax return for the most recent tax year after the prescribed or extended deadline may be eligible for inclusion in the ATL without having to pay the applicable surcharge, provided they meet specific conditions.

The proposed mechanism requires the taxpayer to submit an undertaking via the Iris system using the prescribed ATL Form under sub-section (3) of Section 182A of the Income Tax Ordinance.

As stated in the draft, a person who files the latest tax year’s income tax return after the due or extended date and submits the necessary undertaking through Iris might have their name added to the ATL without the need to pay the surcharge.

The proposed changes are intended to offer a pathway for taxpayers who miss the filing deadline but later complete their tax return and fulfill the required declarations.

The FBR has invited input and suggestions from stakeholders on the proposed amendments.
Any feedback can be submitted to the board within seven days of the notification being published in the official Gazette.

These amendments are part of the FBR’s ongoing efforts to review and improve tax administration processes and provide clearer guidelines regarding the status of taxpayers who file returns after the statutory or extended deadline.

The Active Taxpayers List plays a significant role in Pakistan’s tax system, as being on the ATL can influence the withholding tax rates applicable to individuals and businesses on various transactions.

However, the final process will be determined by the amendments that are approved and officially communicated by the FBR after considering the feedback received from stakeholders.