FBR Integrates AJK, GB Taxpayers into Active Taxpayers’ List
The Federal Board of Revenue (FBR) has made a significant move. They recently announced the integration of taxpayers from Azad Jammu and Kashmir (AJK) and Gilgit-Baltistan (GB) into its Active Taxpayers’ List (ATL). This crucial decision, formalized by SRO 17(I)/2024, aims to streamline revenue collection and broaden tax inclusion. Consequently, it marks a vital step towards harmonizing tax records across all regions under FBR’s authority. The amendment to the Income Tax Rules, 2002, simplifies tax compliance for these residents. Their status now links with the federal ATL if they are already active taxpayers with regional boards.
Eligibility for Inclusion in FBR Active Taxpayers List
Under the revised rules, specific conditions govern inclusion. Firstly, any individual whose name appears on the Active Taxpayers’ List of the AJK Central Board of Revenue, or the Gilgit-Baltistan Council Board of Revenue, will automatically join the federal FBR Active Taxpayers List. This happens under Section 181A of the Income Tax Ordinance. Secondly, this inclusion primarily applies to persons whose temporary or permanent address is located in AJK or Gilgit-Baltistan. Therefore, taxpayers in these regions will benefit from the same privileges. They can also avoid the higher withholding tax rates generally applicable to non-ATL individuals. Ultimately, this fosters a more unified tax environment.
Verification Process for Dual Residents
The FBR recognizes the unique circumstances of some taxpayers. Thus, they outlined a specific verification process for individuals holding both Pakistani and AJK/GB addresses. In such cases, the Commissioner Inland Revenue with jurisdiction over the person’s temporary address (per their CNIC) will conduct a thorough verification. This inquiry uses the IRIS system. Furthermore, it involves obtaining an undertaking from the taxpayer. This undertaking confirms they do not have employment or business activities within Pakistan.
Concurrently, the concerned commissioner of the AJK Central Board of Revenue or the Gilgit-Baltistan Council Board of Revenue verifies via IRIS that the individual’s sole employment or business indeed resides within AJK or Gilgit-Baltistan. This dual verification mechanism prevents misuse. Consequently, it ensures accuracy in taxpayer categorization.
Removal from the Active Taxpayers’ List
While inclusion streamlines processes, the FBR also retains the right to remove individuals from the FBR Active Taxpayers List. This occurs under specific conditions. If the Commissioner Inland Revenue believes a person must file an income tax return under Section 114 of the Income Tax Ordinance, yet fails to comply with a legal notice, their name will be removed. This provision serves as a crucial enforcement mechanism. Ultimately, it ensures all included taxpayers adhere to their obligations. It also underscores the importance of continuous compliance with tax regulations to remain on the ATL.
Broader Implications of AJK & GB Tax Integration
This strategic decision by the FBR promises far-reaching positive implications. It will significantly impact tax administration and national economic integration. By bringing AJK and GB taxpayers into the federal ATL, the FBR aims to improve overall tax record integration. Furthermore, it fosters greater transparency and ensures consistent application of tax laws across all regions. This move simplifies compliance for individuals. Crucially, it strengthens the FBR’s ability to monitor and manage the taxpayer base effectively. It reflects a concerted effort to create a more unified and efficient tax system. This system supports equitable economic development and enhances revenue collection throughout Pakistan, including AJK and Gilgit-Baltistan.
