The federal government has proposed a major increase in the fee required for Associations of Persons (AOPs) to regain their status on the Federal Board of Revenue’s (FBR) Active Taxpayers List (ATL) after missing the income tax return deadline.

Under the Finance Bill 2026, the ATL restoration surcharge for AOPs is proposed to rise from Rs. 10,000 to Rs. 50,000, reflecting a fivefold increase.

The change has been introduced through amendments to Section 182A of the Income Tax Ordinance, 2001, which governs the ATL system administered by the FBR.

AOPs, which include partnership firms, joint ventures, and other collective income-earning arrangements, are required to file annual tax returns on time to remain on the ATL.

Under current rules, late filers are removed from the ATL and face higher withholding tax rates on financial transactions. They can regain active status by filing overdue returns along with a Rs. 10,000 restoration fee.

The proposed revision would increase this cost to Rs. 50,000, significantly raising the penalty for delayed compliance.

Loss of ATL status results in higher tax deductions across banking transactions, property dealings, vehicle purchases, contracts, and other business operations.

If approved by Parliament, the revised surcharge will apply from July 1, 2026, making late tax compliance considerably more expensive for AOPs seeking reinstatement on the ATL.