The last date of tax return 2022 in Pakistan for persons with a normal tax year has been extended by FBR up to the 31st of October 2022. Previously the last date for tax returns was the 30th of September 2022.
The extension in the date of the tax return for the tax year 2022 was under consideration because of a number of requests and presentations from various stakeholders such as chambers of commerce and other trade associations due to some technical and non-technical issues.
The FBR tax filing portal IRIS is facing certain technical issues. The facility of adjustment of the previous year’s refund in the return of the current year has been disabled in the system causing an inability of the taxpayers in claiming/adjusting the refund claims resulting in excessive tax payment for filing of returns. Up to the tax year 2021, in the return form, under the computations tab a field with the title “Refund adjustment of other years against the demand of current year.” was available that allowed the filers to adjust previous refund claims. This tab has been disabled in the revised return form for the Tax Year 2022 so that the filers have to claim refunds separately instead of adjusting the refund in return. The motive behind this is to increase tax collection. In this way, the taxpayers have to pay more tax than actual payable to enable them to file tax returns and apply for a refund for the extra tax paid separately. The process of refund claims always takes much time to mature. In this way, on the one hand, higher tax collection is shown by the FBR and on the other hand, the time value for the holding period of funds is availed by the Government. This causes a loss of the resources of the taxpayers in terms of time and finances. Also, the filers were facing difficulty in signing in to the IRIS portal due to some technical issues during the last week of September 2022 which was a point of concern for the filers and the reason for the request for an extension in the filing date.
In the past few months, the country was facing critical political unrest and uncertainty leading to the economic crisis, inflation, diminishing foreign exchange reserves, and abnormal rupee devaluation. The economy of the country is almost on the brink of collapse and the country is at risk of default.
Followed by the economic crisis mentioned above, the country was hit by natural disasters in the shape of massive floods causing huge loss of human lives, livestock, infrastructure, and agriculture. Besides, the post-disaster issues such as diseases, lack of basic necessities in the flood-hit area, and rehabilitation of the affected masses also became a challenge for the Government. More than 1600 people lost their lives besides the overall losses due to floods are up to 40 Billion US Dollars as estimated by the Government of Pakistan.
These factors have hit the economy and the business in the country badly due to which the stakeholders have represented for extension in the filing of returns for the tax year 2022. Considering these issues genuine, the FBR has extended the last date for filing income tax returns up to the 31st of October 2022 giving a reasonable time for the taxpayers to settle the issues and abide by the legal obligation of filing tax returns.