PTBP Web Desk
Chairman of the Federal Board of Revenue (FBR), Rashid Mahmood Langrial, has spearheaded the introduction of the Tax Laws (First) Amendment Ordinance 2024. This legislative action has garnered robust support from tax experts and chartered accountants across the nation, highlighting a concerted effort to tighten the noose around tax evaders and late filers.
The Push for Tax Compliance
The ordinance, which is set to be promulgated soon, aims to dismantle the legal protections previously enjoyed by non-filers of income tax returns. Shabbar Zaidi, a former Chairman of FBR, has vocally endorsed this initiative, underscoring its necessity in the current economic climate. Zaidi, who during his tenure in 2019 eliminated the non-filer category, praised the ordinance as a step in the right direction. He emphasized, “The prosecution of non-filers is essential, as they have been shielded by legal loopholes in the income tax law for too long.”
Key Provisions of the Ordinance
The Tax Laws (First) Amendment Ordinance 2024 is structured to address three primary categories:
- Non-Filers: Individuals who have never filed their tax returns. The ordinance seeks to strip away the legal cover previously provided to this group, making their prosecution not only possible but mandatory.
- Late-Filers: Those who file their tax returns beyond the due date. The new law aims to impose stricter penalties and possibly criminal charges for habitual delayers.
- Exempted Individuals: This category includes citizens who are not required by law to file income tax returns. Zaidi points out that while the focus is on enforcement, justice must also be served to those who legitimately fall out of the tax net.
Expert Support and Analysis
The backing from seasoned tax professionals like Shabbar Zaidi illustrates the broad support for this reform. Experts argue that this amendment will not only increase government revenue but also foster a culture of compliance. This move is seen as a remedy to the long-standing issue where significant portions of potential tax revenue go uncollected due to non-filing or late filing.
Impact on Tax Culture
The ordinance is expected to cultivate a stricter tax culture in Pakistan, where the rate of tax evasion has historically been high. By ensuring that non-compliance has tangible legal consequences, the government aims to incentivize timely filing and full disclosure of income. This legislative push could potentially transform the tax landscape, making it more equitable and efficient.
Challenges and Considerations
implementing such reforms isn’t without its challenges. Critics might argue about the readiness of the judicial and administrative systems to handle an influx of cases related to tax non-compliance. There’s also the question of how well the ordinance will be enforced, given past experiences where laws exist but enforcement lacks.
