What are the Benefits of being a tax filer in Pakistan in 2023?
FBR Tax Return 2023 Last Date?
The tax year 2023 which is also called the financial year 2022-23 has just closed. Moreover, the tax return for such tax year has also been allowed by the Federal Board of Revenue (FBR) to submit. As per the previous year’s practice following are the due dates for filing tax returns in Pakistan for the tax year 2023.
01: for Individuals, sole proprietors, and salaried persons the last date is 30th September 2023.
02: for a firm, Partnership Business and Association of Persons (AOPs) due date is 30th September 2023.
03: and for a Private, and public limited company the due date to file tax returns for tax year 2023 is 31st December 2023.
How to Become an Active Tax Filer with FBR in 2023?
Now, the annual income tax return for the tax year 2023 has started from July 2023 onward. If you want to know about how to activate filer status with FBR then you can better understand it by dividing it into the following legal forms of taxpayers.
01: for Salaried, Individual, and Sole Proprietors:
If today any one of them gets registration with FBR, then they need to submit tax returns for tax year 2022 (July 2021 to June 2022) as well as tax year 2023 (July 2022 to June 2023). Tax Return for the tax year 2022 needs to submit to become a filer along with payment of penalty at the prescribed rate. Moreover, the tax return for the tax year 2023 is required to file because it has become due after 30th June 2023.
02: for firm, Partnership Business Association of Persons (AOPs), Private & Public Limited Company:
If today (July 2023) above mentioned type of business gets registration with the tax authority (FBR) then they will need to submit a tax return for tax year 2024 after the closing of the financial year ending 30th June 2024. So, it means business (AOPs, Private & Public Limited Company) registered in the tax year is responsible to start tax filing from that tax year only.
Moreover, now such a business has active filer status after getting registration with FBR. As they need to submit tax returns for the tax year 2024 after the closing of the financial year 2024.
What are the Rates of Penalty for Active Tax filer Status with FBR?
The following penalty amount needs to pay to activate the status with FBR after submission of the tax return which requires filing for becoming an active tax filer.
01: For Salaried, individual, and sole proprietorship business penalty amount is Rs1,000.
02: For the firm, Partnership and AOP business penalty amount is Rs10,000.
03: For private and public limited company penalty amount is Rs20,000.
What are the benefits of becoming a tax filer?
First of all, you should understand that if the tax laws of Pakistan require you to file a tax return then it is your responsibility to file it and declare income, expenses, assets, and liabilities. Sometimes, you file your tax return to get the benefits of becoming an active tax filer and even you do not require by law to do so.
Often tax authority (FBR) issues tax notices and requires taxpayers to file tax returns for particular tax years to make declarations, in this case, you have to make compliance on time.
Taxpayers also make declarations and become active tax filers to get benefits of less deduction of taxes on purchases, sale of property, purchase of vehicles, the prize on prize winnings, profit on bank deposits, etc. Moreover, in a lot of cases, a non-filer requires to pay double the tax as compared to the person whose name exits on the active tax filer list.
Filer and Non-Filer Tax Rates In Pakistan 2023
Let us discuss, what benefits active tax filers enjoy on the submission of the tax returns. As per the latest tax rates given below on various transactions, the filer enjoys reduced rates as compared to non-filer of tax returns.
|Prize Bond Winnings||15%||30%|
|Saving Accounts Profits||15%||30%|
|Auction of Property||5%||10%|
|Motor Vehicle Leasing||0%||12%|
|Cash Withdrawal from Bank||0%||.6%|
|International Transactions via|
|Electricity Bill above 25,000||0%||7.5%|
|Sale of Immovable Property||3%||6%|
|Purchase of Immovable Property||3%||10.5%|
|Tax on Registration of Motor Vehicles||Different||3 times|
|Import of Goods||Different||Double|
|On Payments against sale of Goods||Different||Double|
|On Payments against services||Different||Double|
|Payment of Dividend||Different||Double|
|Investment in Sukuks||Different||Double|
|Payments to PE of Non-Residents||Different||Double|
|Execution of Contracts||Different||Double|
From the differences in tax rates applicable to filer and non-filer mentioned above it is clear that having a tax filer status in Pakistan has a lot of advantages.