KARACHI: The Finance Bill 2019 has proposed to do away with the concept of ‘filer’ and ‘non-filer’ and instead introduces provisions to deal with such persons whose names do not appear on Active Taxpayers List (ATL). [the_ad id=”31605″]Through Finance Act, 2014, a concept of ‘filer’ and ‘non-filer’ was introduced whereby a list of ‘filers’ was issued by the Federal Board of Revenue (FBR) from time to time to include such taxpayers who have filed their returns for latest tax year. Enhanced withholding tax rates were prescribed for ‘non-filers’ besides certain special withholding tax provisions which were only applicable on ‘non-filers’.
As a result of special provisions for persons not appearing on active taxpayers list (ATL) the effect shall be as under: a) The rate of withholding tax for certain provisions, which currently prescribe an increased rate for non-filers, is proposed to be enhanced by 100% for persons not appearing on ATL with procedure for provisional assessment and penalty proceedings if such persons fail to file return of income for respective tax year.
On filing of returns, the taxpayers are entitled to claim refund of withholding tax in excess of their tax liability. These provisions are contained in the Tenth Schedule.
It is also proposed that a person can be included in the active taxpayers list (ATL) even on filing of return after the due date, if he pays surcharge at applicable rates.
Persons not appearing in the ATL will not be issued refund during the period when the person is not in ATL. Furthermore, such person will also not be entitled to additional payment for delayed refund and the period when he was not included in ATL shall be excluded for computation of period for such purposes.
The special provisions of Tenth Schedule are applicable on following withholding tax provisions:
37A Capital gains on disposal of securities; 148 Imports; 148A Tax on local purchase of cooking oil or vegetable ghee by certain persons; 150 Dividends; 150A Return on investment in Sukuks; 151 Profit on debt; 152 Certain payments to non-residents; 152A Payments for foreign produced commercials; 153 Payments for goods, services and contracts; 153B Payment of royalty to resident persons; 156 Prizes and winnings; 156A Petroleum products; 231B Advance tax on private motor vehicles; 233 Brokerage and commission; 233A Collection of tax by a stock exchange registered in Pakistan; 234 Tax on motor vehicles; 234A CNG Stations; 236 Telephone and internet users; 236A Advance tax at the time of sale by auction; 236C Advance tax on sale or transfer of immovable property; 236G Advance tax on sales to distributors, dealers and wholesalers; 236H Advance tax on sales to retailers; 236HA Tax on sale of certain petroleum products; 236K Advance tax on purchase or transfer of immovable property; 236S Dividend in specie; 236Y Advance tax on persons remitting abroad through credit, debit or prepaid cards.
A procedure has been prescribed whereby a person not on ATL can be excluded from enhanced withholding provisions by an order of the Commissioner. The procedure is similar to the one prescribed for payments to non-residents with an exception that in this case, failure to pass an order within thirty days will result in a deemed order accepting the application.