The Federal Board of Revenue (FBR) has proposed a key amendment to the Income Tax Rules 2002, aiming to enhance transparency and digitalization within the country’s tax system. The proposed change mandates that the filing process for taxpayers become entirely online and electronic.
According to the FBR’s suggested amendment, electronic filing (E-Filing) of Income Tax Returns and Withholding Statements will now be made mandatory for individual taxpayers. This means that tax declarations and withholding statements must be submitted exclusively online, a measure intended to streamline the tax process and ensure accuracy of records.
Public Input and Legal Framework
- Deadline: The FBR has issued a notification, inviting feedback and objections from concerned stakeholders regarding these proposals within 7 days.
- Rule Change: The amendment has been introduced in Sub-Rule (2DD) of Rule 73 of the Income Tax Rules 2002, with the declared objective of promoting digital transparency in the tax system.
Mandatory Integration for Retailers
The FBR has also announced crucial decisions for retailers aimed at broadening the Sales Tax net:
- Integration Requirement: Business integration has been made mandatory for retailers whose withholding tax exceeds PKR 100,000.
- Expanded Scope: Under the amended Sales Tax Rules 2006, retailers with withholding tax up to PKR 500,000 will also be brought under the regulatory framework.
- Legislation: The new law has been introduced under Section 150Q of the Income Tax Ordinance, while the integration itself will be carried out under Section 43A of the Sales Tax Act 1990.
