Taxpayers Rush to Secure Active Taxpayers List Status to Avoid FBR Crackdown

Taxpayers Rush to Secure Active Taxpayers List Status to Avoid FBR Crackdown

March 2, 2024

In Pakistan, taxpayers are scrambling to gain inclusion in the newly released Active Taxpayers List (ATL) to avoid severe penalties and actions from the Federal Board of Revenue (FBR). The FBR published the updated ATL on March 1, 2024, listing individuals and corporate entities who filed their income tax returns for the tax year 2023 by the original deadline or by February 29, 2024, with the payment of a default surcharge.

The new ATL lists 3.35 million active taxpayers, a significant drop from the 5.73 million recorded for the previous tax year. This decrease raises concerns about compliance, considering the record number of filings in 2023. The initial deadline for income tax returns for the tax year 2023 was set for September 30, 2023, but Circular No. 4 of 2023-24 extended the deadline to October 31, 2023, allowing taxpayers who filed within this period to be included in the ATL.

However, taxpayers who missed this extended deadline are not included in the ATL 2023. To remedy this, many rushed to pay the default surcharge to secure their spot on the ATL. The surcharge varies based on the taxpayer’s category: Rs 20,000 for companies, Rs 10,000 for Associations of Persons, and Rs 1,000 for individuals.

The FBR expects a significant increase in the number of active taxpayers on the ATL 2023 due to its aggressive stance against non-filers and those missing from the list. Under Section 114B of the Income Tax Ordinance, 2001, the FBR has the power to enforce penalties on taxpayers not listed on the ATL, including disabling mobile phone, electricity, and gas connections. The FBR can issue an income tax general order for individuals required to file returns but absent from the ATL, with severe consequences for non-compliance.

Those not listed on the ATL also face higher tax rates throughout the 2024 tax year, serving as a strong motivator for taxpayers to comply with the ATL requirements. The FBR’s strict measures reflect the government’s dedication to promoting tax compliance and ensuring that all taxpayers meet their fiscal responsibilities. In this context, the ATL serves as a key instrument for enforcing tax regulations and enhancing the nation’s revenue collection efforts.

As taxpayers navigate this challenging environment, the need to comply with ATL requirements is more critical than ever. The FBR’s measures not only underscore the importance of timely tax filing but also serve as a reminder of the consequences of failing to meet tax obligations. The government’s rigorous approach to tax enforcement demonstrates its commitment to a more compliant and transparent tax system.