KARACHI: The individuals – who pay adjustable withholding income tax at various payments – have right to claim refunds, but majority of them do not claim because they do not file returns, said Asrar Raouf, former senior member of the Federal Board of Revenue (FBR).
“Refunds can only be claimed when an individual or a corporate firm files income tax return,” Raouf said, who is presently running T&D Block – which is a tax services and support firm.
A person can claim refunds on withholding tax deducted on phone and electricity bill payments, cash withdrawal, school fee and event.
Raouf said from this year salaried persons drawing over Rs400,000 are required to file income tax returns along with the wealth statement.
He said this will help the FBR to increase the number of taxpayers in the country. “Unfortunately, the board received about one and half million returns last year in the country of 200 million. Persons are paying tax through withholding mode and not on the tax roll,” he said. “The low number of taxpayers causes bad name for the country,” he added.
Raouf said this year the FBR is aggressive in enforcing the tax returns file law as the tax managers have prepared the lists of statement of employers submitted last year about the details of tax deducted of their employees.
The FBR has extended the filing of income tax return to October 31 for individuals and salaried persons. “After the cut of date, the FBR will issue notices to non-filer with minimum penalty of Rs50,000,” he said and added that on further noncompliance the penalty amount would increase.
Asrar Raouf has spent about 38 years in FBR and served at various key posts and after retirement he started the consultancy services to facilitate taxpayers in filing of tax returns.
“At T&D Block, the professionals are contacting employers to facilitate their employees drawing above Rs400,000 in filing their obligations,” Raouf said. “The firm convinces employers to pay the nominal fee on behalf of the employees against the filing of tax return,” he added. He said with the challans of tax withheld the tax consultancy firm ensures refunds.