Get the latest news and updates from Dawn
ISLAMABAD: The government has substantially increased penalties for late filing of income tax returns, restoration to the active taxpayers list, and deficiencies in document accessibility and formatting, apparently an effort to strengthen tax compliance.
The increases, introduced through the Finance Bill FY27, apply across federal taxes, including income tax, sales tax and federal excise duty. In some cases, penalties have more than doubled and are widely seen as providing the Federal Board of Revenue (FBR) with an additional tool for revenue mobilisation.
Under the proposed changes, the cost of returning to the active taxpayers list (ATL) has been raised fivefold for companies to Rs100,000 from Rs20,000, while it will increase to Rs50,000 for associations of persons from Rs10,000 and Rs25,000 for individuals from Rs1,000.
The substantial increase is intended to improve tax compliance, but it will be punitive for small taxpayers.
