The federal government has proposed a significant increase in the fee for restoring taxpayer status on the Federal Board of Revenue’s (FBR) Active Taxpayers List (ATL), sharply raising the cost of filing income tax returns after the deadline.
Under the Finance Bill 2026, amendments to Section 182A of the Income Tax Ordinance, 2001 propose a major revision in the ATL restoration surcharge. For individuals, the fee would rise from Rs. 1,000 to Rs. 25,000 — a 25-fold increase, or around 2,400 percent.
The proposed structure also increases penalties for other categories of taxpayers. Associations of Persons (AOPs) would now pay Rs. 50,000 instead of Rs. 10,000, while companies would be required to pay Rs. 100,000, up from Rs. 20,000.
The ATL, maintained by the FBR, lists taxpayers who file their returns within the prescribed deadline. Those who miss the deadline are removed from the list and face higher withholding tax rates on banking transactions, property deals, vehicle registration, and other financial activities.
Currently, late filers can regain ATL status by submitting overdue returns along with a relatively small surcharge. However, authorities argue that the existing penalties are not strong enough to discourage habitual late filing, prompting the proposed increase aimed at improving timely compliance and strengthening revenue collection.
If approved by Parliament, the revised ATL restoration charges will take effect from July 1, 2026, making late tax filing substantially more expensive for individuals and businesses.
