As a taxpayer in Pakistan, it is important to stay tax compliant and keep your Active Taxpayer status up to date. Failure to do so can result in penalties, fines, and higher rates of withholding taxes. In this article, we will discuss the importance of updating your Active Taxpayer status before the deadline to avoid such consequences.
What is the Active Taxpayer List?
The Active Taxpayer List (ATL) is a list of taxpayers who have filed their tax returns and are compliant with tax laws in Pakistan. The Federal Board of Revenue updates the ATL at the end of February each year for the preceding filing year. Being on the ATL provides various benefits, such as being eligible for tax refunds and having a lower rate of withholding tax.
What happens if you don’t file your tax return on time?
Individuals and Association of Persons who fail to file their tax return on time can still enjoy the benefits of being a filer until the end of February each year. However, for the tax year 2022, those who do not file their returns by the deadline will be excluded from the ATL. This means that they will not be eligible for the benefits of being on the ATL and will have to pay higher rates of withholding tax.
What are the penalties for not updating your Active Taxpayer status?
In addition to higher rates of withholding tax, inactive taxpayers are also subject to fines and penalties. To reappear on the ATL, individuals will have to pay a surcharge of Rs. 1,000, while Association of Persons will have to pay a surcharge of Rs. 10,000 and companies will have to pay a surcharge of Rs. 20,000. It is, therefore, important to update your Active Taxpayer status before the deadline to avoid these penalties and surcharges.
How to update your Active Taxpayer status?
To update your Active Taxpayer status, you need to file your tax return before the deadline. The deadline for filing tax returns in Pakistan is usually September 30th of the year following the tax year. However, due to Floods, the deadline for the tax year 2021 has been extended to December 15th, 2022.
You can file your tax return online through the Federal Board of Revenue’s Iris portal or by visiting a Tax Facilitation Center. It is important to ensure that all necessary documents are attached and that the tax return is filed accurately and on time.
Updating your Active Taxpayer status is crucial for staying tax compliant in Pakistan. Failure to update your status can result in penalties, fines, and higher rates of withholding taxes. By filing your tax return on time, you can avoid these consequences and enjoy the benefits of being on the Active Taxpayer List. Remember to file your tax return before the deadline to avoid any unnecessary surcharges and penalties.