Tax Resturns
The federal government has decided to introduce the punitive legal regime in order to convert the non filers into the active tax payers after the budget of the financial year 2019-2020. Govt Introduces New Legal Regime for 2 Million Non Filers.
The government has made the decision to take the major policy initiative in order to double the number of current tax payers to four million in next two years and it will bolster the overall goal of levy the additional Rs.688 billion taxes and it will be effected from July 2019.
Now the higher income tax rates are charged from those, who do not file their annual statements of income and assets. The government has made the plan to start the legal proceedings against such people, who carry out cash or bank transactions but they do not find in the Active Taxpayer List (ATL).
Currently, there are less than 2 million people on the ATL and they have submitted their annual wealth and income statements to Federal Board of Revenue (FBR). FBR suggested to include 10th schedule in Income Tax Ordinance 2001 and it will be added with two big legal components and there will be withholding tax related section in order to attract 100 percent higher rates than those, which is paid by the income tax return filers.
The second component needs withholding tax collecting agents to convey the traceable information of non-filers to FBR and it will send the provisional tax demand to the individuals on the concealed income assumption. The withholding tax agents will be required to get the computerized identity card (CNIC) number and other related information of the people.
The 10th schedule exceptions will be the cases, where fixed income is involved or business transactions are known and they are not outside the formal economy. The government is also considering to abolish the 20 withholding tax sections that do not bring significant revenues.
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