"Experts request FBR to extend tax return deadline due to technical and legal challenges."
"Tax professionals and associations, including chartered accountant firms and tax advisers, have requested an extension of the income tax return filing deadline to October 31, 2023, due to technical and legal issues. The Federal Board of Revenue (FBR) previously set the deadline for September 30, 2023, and stated it would not be extended. The Karachi Tax Bar Association has specifically alerted the FBR to a new IT glitch in the IRIS system, preventing taxpayers from responding to notices issued by IR Officers following modifications of appeal orders by the Commissioner Inland Revenue- Appeals (CIR-A). This system issue has recently emerged and lacks an option for taxpayers to submit their responses."
"Farhan Tariq from FB Consultants reported technical issues with IRIS 2.0, including inconsistent file formats, problems with importing data from previous tax years, and challenges with adjusting refunds. The Karachi Tax Bar Association also informed the FBR Chairman that data from the previous year's wealth statement was unexpectedly missing from the current year's statement, causing significant hardship and inconvenience for taxpayers. This situation has raised concerns that the Information Technology (IT) system, IRIS 2.0, is currently causing frustration instead of alleviating the burdens of taxpayers."
"Asif S Kasbati, a member of the Pakistan Business Council Core Tax Committee, explained that according to section 118 of the law, individuals, associations of persons with a fiscal year from July 1, 2022, to June 30, 2023, and companies with year-ends between January 1, 2022, and December 31, 2022, must file their tax year (TY) 2023 returns by September 30, 2023. However, due to September 30, 2023, falling on a Saturday (a public holiday), the due date has been moved to Monday, October 2, 2023, in accordance with the General Clauses Act."
Kasbati, a member of the ICAP Fiscal Laws Committee, anticipates an extension of the tax return filing deadline up to October 31, 2023, for several reasons:
1. The FBR and PRAL missed the deadlines for the draft and final return forms, causing a delay of over six months in their issuance.
2. Various issues in the return forms were highlighted, with some being resolved only on September 2, 2023, despite assurances that remaining problems would be addressed.
3. The annual sales tax return deadline on September 30, 2023, is expected to increase the workload, and there are concerns about the IRIS system's performance during this period.
4. It is expected that a minimum of 5 million returns will be filed for Tax Year 2023, but so far, fewer than one million have been filed.
Due to these factors, Kasbati predicts that the FBR will likely extend the deadlines until November 30, 2023, with an initial general extension to October 31, 2023, to accommodate taxpayers and address the ongoing issues.
"Given the current circumstances, Kasbati advises taxpayers to file their Income Tax Return by September 30, 2023, to avoid Default Surcharge, Penalties, and notices. This recommendation aligns with the FBR's SMS notifications, which explicitly state that no deadline extension will be granted.
Additionally, it's important to note that FBR Offices and Departments will be open until 8 p.m. on September 30, 2023, even though it's a Saturday, as per an FBR Circular.
For those who wish to seek an extension, Kasbati suggests submitting an online extension application with a valid reason, considering the provisions of section 119 of the Income Tax Ordinance 2001, in case no official extension Circular is issued."
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