THERE is no doubt that the Federal Board of Revenue (FBR) has been striving hard to facilitate taxpayers through a series of reforms and measures aimed at simplification of the system. Every year announcements are made to simplify the tax returns for individuals, AOPs and companies but there are still major loopholes that discourage people from becoming filers despite incentives and penalties.
Based on consistent complaints of the people, the Federal Tax Ombudsman has asked the FBR to design a separate return in simplified form for those whose only income is salary or pension. It noted that the present format of the tax return for salaried individuals is too complex for an ordinary individual to understand as the prescribed format contains many fields which are not relevant to a taxpayer whose only source of income is salary/pension. It rightly noted that while tax is deducted at source from salaried individuals and by banks and National Savings Centres in the cases of pensioners, no further payment of tax is payable by the salaried individuals and pensioners at the time of filing return. In this backdrop, it is hoped that a truly simplified form would be devised for salaried class and pensioners. There are also complaints that profit on investment in Behbud schemes of NSC are exempt from tax but the present system treats it as taxable income. Similarly, theoretically, a filer can review his return within sixty days of filing without getting approval from the Commissioner Income Tax but practically this is not being allowed, which violates the essence of the law. At a time when the FBR is trying to give incentives to become filers, these hiccups discourage people from joining the tax net. It is, therefore, hoped that drawbacks of the system would be removed and as per instructions of the FTO, separate but genuinely simplified return for salaried class and pensioners would be devised.
