Govt makes only paltry recovery from closure of audit cases in Pakistan
Availing the Pakistani government’s amnesty scheme for the closure of automatic audit, around 48,214 individuals deposited Rs1.04bn until January 11 by paying penalties or higher taxes, it was learnt through knowledgeable sources.
The total amount to be deposited under the scheme is likely to be much higher as the Federal Board of Revenue (FBR) has already extended the last date to avail the amnesty till January 31.
Moreover, due to lacklustre response, around 645,347 non-salary audit cases are still pending on the audit list, according to the source.
These individuals will either have to avail the scheme or be processed under normal audit procedures, the source said, adding it is also likely that the last date may be extended further in order to facilitate these individuals.
The FBR issued electronic au- dit notices to as many as 1,035,875 late filers since November 14 with a deadline to provide records, documents and books of their accounts.
These taxpayers had submitted their returns for tax years 2015, 2016 and 2017 after the deadlines had passed in the respective tax years.
These cases included 342,314 salaried individuals and 693,561 non-salaried individuals including association of persons (AoPs) and companies.
The FBR offered an amnesty scheme in order to abolish these cases on the condition that individuals either pay 25% higher taxes than the tax paid with the return or in case, no tax was payable, 2% of the turnover and to file revised return by January 31.
Moreover, the cases of 342,314 salaried individuals selected for automatic audit for late filing were settled without collecting penalty amount of Rs20,000, a tax official in the FBR confirmed. He said that the penalty amount collected in few cases will be adjusted against their tax liabilities in the current tax year.
For the non-salaried 693,561 individuals, the FBR had earlier given a deadline until December 31 which has now been extended to January 31.
The data shows that, of the Rs1.04bn deposited till January 11 under section 214E of the scheme, the payments include a penalty amount of Rs360mn and approximately Rs675mn under other heads.
The city-wise settlement shows that Karachi has emerged the major beneficiary of the scheme. Around 13,769 individuals from the metropolis have availed the scheme by depositing an additional amount of Rs324.98mn to close their audit cases.
Lahore followed as the second major city to avail the scheme, where as many as 11,965 individuals closed their audit cases by depositing Rs300.26mn. In the federal capital, 3,062 individuals availed the scheme by paying Rs89.3mn.
In Faisalabad, 3,619 individuals paid Rs58.8mn, in Peshawar 1,410 individuals paid Rs48.7mn where as in Quetta only 508 individuals opted the scheme by paying Rs9.3mn.
The remaining cases were settled in other cities including Abbottabad, Bahawalpur, Gujranwala, Hyderabad, Multan, Rawalpindi, Sahiwal, Sargodha, Silakot and Sukkur.
Under the Finance Supplementary (Amendment) Act 2018, nonsalaried individuals, AoPs and companies have an option to get their audits closed on the payment of either 25% higher taxes than the tax paid with the return or in case no tax was payable 2% of the turnover and to file revised return by December 31.
An amendment in income tax law was made through Finance Act 2015 by the previous government that provided for automatic selection for audit if an individual had failed to file returns by the due date.
The amendment was subsequently withdrawn through Finance Act 2018, however, the cases that were automatically selected under the said provision prior to its withdrawal were still to be audited.