M J Hayat
LAHORE: The Federal Board of Revenue (FBR) is eyeing 25 percent more revenue from late tax return filers as the government has come up with a solution of Section 214-D (automatic selection for audit) of the Income Tax Ordinance 2001 for income tax audit by introducing Section 214-E in the said ordinance through Supplementary Finance Act, 2018.
The bureau has also begun holding awareness seminars among the various tax bars of the country to create awareness regarding Section 214-E pertaining to closure of audit which is introduced through supplementary Finance Act, 2018 notified on 08-10-2018.
In this connection, recently a seminar was held in Faisalabad by the Regional Tax Office Faisalabad and such awareness is also being imparted in other regions as well.
During FY 2017-18, hundreds of notices were issued to tax payers by the FBR officials for selection in audit due to late filing of tax returns in FY 2015, 2016 and 2017. The audit selection was made by an automatic selection under section 214-D. Service of audit selection notices created a panic situation among bonafide taxpayers and FBR came under severe criticism.
Recently introduced ‘closure of audit’ clause has given tax payers an opportunity to revise return voluntarily till 31st December, 2018 by payment of 25pc higher tax or 2pc turnover tax (where no tax is payable).
The clause 214-E is valid till December 31, 2018 only.
It’s a kind of amnesty or one time solution given to the late tax return filers. Whereas, on the other hand there is a view that introduction of this clause also shows the incapability of FBR officials to conduct audit of such massive number of late tax return filers and a simple solution has been found to pay 25pc higher tax than that shown the return get yourself regularized.