No extension in Sept 30 deadline for filing tax returns: FBR

• People can seek extension from relevant tax commissioner: spox.
• FBR official underscores three-month time for return submission.
• Bakhtiar Muhammad rules out countrywide extension in deadline.

ISLAMABAD: The Federal Bureau of Revenue (FBR) on Saturday announced that it will not be extending the September 30 deadline set out by the tax collecting authority for the submission of tax returns.

"Historically, a facility used to be given [to the masses] by extending the overall deadline. However, this time the decision has been made that the date [for submission of tax returns] will not be extended and September 30 will be the last date to file tax returns," FBR spokesperson Bakhtiar Muhammad said while speaking to Geo News.

Traditionally the FBR, in recent years, has adopted the practice of extending the tax return submission deadline.

Last year, the authority pushed the date for the filing of tax returns to October 31.

However, it seems that the FBR intends to provide no leeway and intends to adopt a rather strict approach towards the issue amid the incumbent government's strenuous efforts to expand the tax net and increase revenue generation in light of the multi-pronged economic challenges faced by the country.

In June, Prime Minister Shehbaz Sharif-led administration in its tax-heavy budget passed in June, set out an ambitious taxation plan to boost its prospects of securing a fresh bailout deal with the International Monetary Fund (IMF) — which it eventually did as the programme now awaits the approval of the Fund's executive board.

Elaborating on the authority's decision against extending the deadline, the spokesperson underscored that it was a legal requirement to submit the tax returns by September 30.

Acknowledging that some filers may find it difficult to submit their returns before the due date, such people can reach out to their respective tax commissioners and seek an individual extension as provisioned in the law.

They can secure an extension owing to their specific reasons, however, the deadline will not be pushed beyond September 30 for the entire country overall, he added.

When asked about this might leave thousands unable to submit their tax returns, the FBR spokesperson said that this was what the authority warned the masses before the deadline expires.

Noting that there were still nine days left to submit the returns, the official said: "There is a three-month period [for people] to file their tax returns from July 1 till September 30. If they wanted to submit their returns, they would have done so during this time".

Tax shortfall fears

Last week, The News reported that the FBR has proposed drastic measures to avoid a possible shortfall in tax collection including freezing bank accounts and imposing a ban on the purchase of property and vehicles for tax evaders.

Facing a monumental tax shortfall in the first quarter (July-September) under the IMF programme of $7 billion Extended Fund Facility (EFF) coupled with its failure to bring 3.2 million retailers into the tax net, the tax collection body has geared up for significant taxation measures against millions.

Sources said that an internal assessment of the FBR has shown a tax shortfall of over Rs220 billion for the first quarter (July-September) against the agreed target of Rs2,652 billion.

The authority faced a shortfall of Rs98 billion in August 2024. The FBR had collected Rs1,456 billion in the first two months (July and August) against the assigned target of Rs1,554 billion leaving the body with the challenging task of fetching Rs1,196 billion during the ongoing month to materialise the first quarter agreed target with the IMF.

The annual tax collection target of FBR envisaged Rs12,970 billion, which was approved by parliament (Rs12,913 billion).

Speaking to the publication, official sources confirmed that the FBR identified two million nil filers out of the total of six million return filers.

Suggesting to categorise non-filers into three categories, the authority has recommended the government impose a fine of Rs1 million for incorrect/incomplete tax returns.

The FBR official further added that "nil filers" would have to face severe action including freezing of their bank accounts and a ban on the purchase of properties or vehicles with an immediate effect.

Whereas, those evading payment of tax amounts ranging from Rs0.5 million to Rs1 million will face disconnection of electricity and gas connections.

It is to be noted that previously, the tax collection body also ordered the disconnection of mobile phones of 0.5 million non-filers, but it could not achieve the desired results.

The FBR, in the third category, has tabled the recommendation that if the tax dodgers were under filers up to the tune of Rs1 million or more, it would also propose some more measures against them.

Furthermore, the tax authority has decided to outsource audits of high-net-worth individuals (HNWs) and companies.