Prime Minister Shehbaz Sharif is set to make a final decision today regarding a one-month extension for filing income tax returns. This decision comes in response to the Federal Board of Revenue’s (FBR) system failures, which have hindered submitting returns containing large volumes of data and information.
On Sunday, the FBR received numerous requests from tax bars and associations nationwide, urging an extension
Despite previous communications with the FBR, the issue remains unresolved, making it impossible for taxpayers to meet the September 30 deadline. The IRIS software, intended to facilitate tax filings, is plagued by technical failures, slow response times, and errors in tax calculations. These persistent issues have prevented taxpayers from completing their filings accurately and on time, particularly concerning minimum tax calculations. Even if the IRIS system were functioning properly, an additional 45 days would be needed to complete all tax returns.
Many taxpayers struggle to comply due to the complexity of the laws and return forms. The complications in return forms and the growing number of taxpayers necessitate an extension of the filing deadline to allow for more efficient and accurate submissions.
The electronic return form was issued on August 28, 2024, via SRO 1321(I)/2024, providing only 32 days for compliance. This limited timeframe, combined with systemic challenges in IRIS, has made it impossible for taxpayers to meet the September 30 deadline, despite the usual 90-day period following the close of the tax year on June 30.
The fundamental rights of taxpayers, guaranteed by the Constitution, must be respected, including the right to a fair opportunity to comply with tax obligations. The current circumstances place an undue burden on taxpayers, preventing them from fulfilling their obligations within the prescribed timeframe. Extending the deadline is essential to ensure compliance without undue hardship or fear of penalties.
The prevailing circumstances have led to a collective call for extending the income tax return filing deadline. In light of these challenges, there is an earnest request to extend the deadline by at least 45 days, up to November 15, 2024.
In an urgent communication to the FBR Chairman, the Pakistan Tax Bar Association highlighted that compliant taxpayers face difficulties due to the inefficient and slow IRIS system. The system’s slow performance has prevented taxpayers from processing and filing returns.
The association reported constant complaints about the system shutting down daily from midnight to 4 AM and experiencing slow performance throughout the day. The system is incorrectly calculating tax on total income, including exempt income, and has longstanding issues with minimum tax calculations. Additionally, there are problems with data disappearing after entry, and multiple challans not reflecting in the system.
Given these issues, the association emphasized the need to extend the filing deadline until the FBR provides a smooth and efficient IRIS system. Without prejudice to these concerns, they expect the FBR to grant at least a 30-day extension to allow taxpayers reasonable time to file returns with proper disclosures and peace of mind.
