ISLAMABAD: The Federal Tax Ombudsman has recommended the Federal Board of Revenue to remove deficiencies in its operating system and ensure smooth payment of tax and filing of returns in accordance with the amended provisions of law.
The FTO in its findings of complaint received from Shahid Mushtaq (complainant) versus Secretary Revenue Division (respondent) also asked the FBR to submit report in this regard within 45 days. The complaint was filed against the failure of the FBR to implement the changes brought in income tax law for making Computerised National Identity Card (CNIC) as Nation Tax Number (NTN).
The complaint has a wider perspective impacting the public at large. Basic issue raised in the complaint relates to the mandatory filing of income tax return by the salaried individuals after the amendment introduced in sub-section (4) of section 181 of the Income Tax Ordinance, 2001 requiring the CNIC to be used as NTN for tax year 2015 onwards.
The individuals deriving income from salary are obliged in terms of SRO 791(1) 2015 dated 10.08.2015 to the income tax return electronically whereas the individuals earning income from sources other than salary could file the returns electronically or manually.
The complainants view was that consequent to the amendment in law, returns by individuals could be filed on the basis of CNIC without obtaining NTN by entering into registration process and this process is contrary to the amended provisions of law as NTNs are being forcibly allotted through the registration process which is against the spirit of amendment in law. Both sides heard and relevant facts considered.
The amendment in law through Finance Act, 2015 requires the CNIC (13 digits) to replace the NTN (7 digits) by virtue of which the CNIC becomes the taxpayer’s identifier, instead of previous NTN.
However the requirement of registration as a taxpayer has not been done away by the legislature and consequently all individuals salaried or others are obliged to get registered with the FBR in terms of section 181 of the Ordinance.
As deposed by the Department, a return submitted by new individuals without having been registered would not be valid and such individuals would not be treated as filers to get consequential benefits under the law.
Evidently the taxpayers’ registration process introduced after the amendment in law through Finance Act, 2015 prescribing conditions is beyond the mandate of relevant law and contrary to Income Tax Rules. The departmental representatives assured that a recheck of tax payments procedures would be carried out to remove the bottlenecks in order to facilitate tax payments on the basis of CNIC and filing returns.
