The tax landscape in Pakistan is facing a wave of challenges that have led tax professionals, chartered accountant firms, and experts to unite in their request for an extension to the income tax return filing deadline. The original deadline, set by the Federal Board of Revenue (FBR) for September 30, 2023, has become a matter of concern due to various technical and legal issues.
One of the major concerns voiced by tax professionals is the presence of technical glitches in the Integrated Risk Information System (IRIS) 2.0, the online platform used for filing tax returns.
Taxpayers have reported difficulties with file formats, importing data from previous returns, and encountering obstacles when trying to adjust refunds from prior tax years. These technical issues have left many individuals and organizations frustrated and struggling to complete their tax filings accurately and on time.
Adding to the woes is a reported glitch in the IRIS system that prevents taxpayers from responding to notices issued by IR Officers (IROs) after modifications to appeal orders by the Commissioner of Inland Revenue- Appeals (CIR-A). This hiccup in the system has created confusion and further delayed the filing process.
Another distressing issue noted by the Karachi Tax Bar Association is the sudden disappearance of data from the previous year’s wealth statement in the current year’s statement. This unexpected turn of events has left taxpayers puzzled and inconvenienced, as they now have to recreate and reenter crucial financial information.
As per the existing tax laws, individuals and associations with a year-end from July 1, 2022, to June 30, 2023, and companies with a year-end between January 1, 2022, to December 31, 2022, are mandated to file their tax year (TY) 2023 returns by September 30, 2023. However, due to September 30, 2023, falling on a Saturday (a public holiday), the due date is expected to be extended to Monday, October 2, 2023, in accordance with the General Clauses Act.
Several reasons underpin the collective call for extending the income tax return filing deadline until October 31, 2023. First and foremost, there have been missed deadlines by both the FBR and Pakistan Revenue Automation Ltd (PRAL), leading to a ripple effect of challenges in meeting the original filing deadline. Delays in uploading draft and final return forms on IRIS by these authorities have only exacerbated the situation, leaving taxpayers in a quandary.
Furthermore, it is anticipated that the IRIS system will experience a significant surge in usage as the filing deadline approaches, potentially causing technical hiccups and slowdowns. To avoid a chaotic rush and ensure that taxpayers can complete their filings smoothly, an extension is deemed necessary.
Lastly, the number of tax returns filed for Tax Year 2023 has been notably lower compared to the previous year, Tax Year 2022. This is indicative of the difficulties and uncertainties taxpayers are facing in navigating the current tax filing process.
Tax professionals and experts are advocating for a fair and equitable solution that allows taxpayers the time and resources they need to fulfill their tax obligations accurately and without undue stress.
An extension until October 31, 2023, would not only provide much-needed relief but also demonstrate a commitment to a smooth and efficient tax filing process in Pakistan.