Numerous stakeholders, including Tax Bar Associations, chartered accountant firms, tax advisers, and experts, have made a compelling case to the Federal Board of Revenue (FBR) to extend the deadline for income tax return filing up to October 31, 2023. Their request stems from critical technical and legal issues hampering the tax return filing process.
Just last week, the FBR sent out system-generated SMS notifications to all taxpayers on September 24, emphasizing the original deadline of September 30, 2023, for filing income tax returns and a firm statement that there would be no extensions.
However, the Karachi Tax Bar Association has raised concerns about a new IT glitch affecting the Integrated Risk Information System (IRIS), which is making it impossible for taxpayers to respond to notices issued by IR Officers (IROs). This issue arises following modifications of orders in appeal orders by the Commissioner Inland Revenue- Appeals (CIR-A). Once these modifications occur, the concerned IRO supposed to send a notice to the taxpayer for further proceedings, but there is currently no functionality within IRIS 2.0 to enable the taxpayer to submit their reply or response.
According to Farhan Tariq of FB Consultants, IRIS 2.0 currently plagued by various technical problems. Some files are opening in the old format, while others display the new format. Moreover, the import feature for Tax Year 2022 portal data from previous returns is malfunctioning, and there are complications in adjusting refunds from previous tax years.
The Karachi Tax Bar Association also informed the FBR Chairman that data from the previous year’s wealth statement mysteriously vanished from the current year’s statement, causing considerable inconvenience to taxpayers. They emphasized that Information Technology (IT) should simplify the tax process, but the current state of IRIS 2.0 appears to be doing the opposite by causing frustration.
As per the law, individuals and associations with a fiscal year from July 1, 2022, to June 30, 2023, and companies with a year-end between January 1, 2022, and December 31, 2022, required to file their tax year (TY) 2023 returns by September 30, 2023, considering the General Clauses Act. However, since September 30, 2023, falls on a Saturday, a public holiday, the due date would technically extend to Monday, October 2, 2023.
Experts, like Asif S Kasbati, a Pakistan Business Counsel Core Tax Committee Member, anticipate an extension of the return filing deadline until October 31, 2023, for several reasons:
- FBR and PRAL missed the deadlines for uploading draft and final return forms, resulting in a six-month delay.
- Numerous issues in the return process have identified, some of which have only partially resolved.
- Anticipated heavy load on the IRIS system.
- A significant disparity in the number of returns filed for TY 2023 compared to TY 2022.
In essence, these challenges have created a compelling case for extending the income tax return filing deadline, allowing taxpayers the time and resources needed to navigate these technical and legal hurdles effectively.
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