Islamabad: The Federal Board of Revenue (FBR) is planning to raise various penalties on non-compliance with various tax laws, according to a news report.
The federal institution recently introduced eight new penalties in the Income Tax Ordinance 2001 through the Finance Bill 2019.
As required by Section 165-B of the Income Tax Ordinance, financial institutions concerned need to provide information with regard to non-residents on a timely basis. The FBR introduced four news sections in the ordinance to penalise the institutions which fail to do so.
In the case of non-compliance with Section 165-B, institutions will have to pay a penalty of PKR 10,000 for each default, and an additional PKR 10,000 each month until the default is addressed. The same amount will be applicable if institutions fail to furnish valid self-certification, or obtains false certification from a reportable jurisdiction person.
For the reportable jurisdiction person themselves, a PKR 5,000 penalty will be applicable for each fault, and an additional PKR 5,000 per month until the fault is addressed. Moreover, FBR will collect a charge of 5% of the determined value of a property as stamp duty. This fee is applicable on property valued higher than PKR 5 million.
FBR will also collect a penalty of PKR 100,000 or 200 % of the tax, whichever amount is higher, which any offshore evader attempts to evade. This penalty will be imposed after the due legal proceedings. Anyone who aids and abets offshore tax evasion will have to pay a penalty of PKR 300,000 or 200% of the tax which was sought to be evaded. A similar penalty worth PKR 100,000 or equal to 100% of the tax, whichever amount is higher, will be imposed on anyone involved in relocating an asset from a specified territory to an unspecified one.
As for the seven existing penalties previously notified, their rates were also increased. If a person fails to furnish his/her source of income, they will have pay a penalty of PKR 40,000 instead of PKR 20,000. In addition to this penalty, anyone who fails to make an application for registration will have to pay PKR 10,000 instead of PKR 5,000.
If a person has not filed their wealth or reconciliation statement, they will be liable to pay a penalty of 0.1% of the taxable income per week or PKR 100,000, whichever amount is higher.