Prime Minister Shehbaz Sharif is anticipated to make a final decision on a potential extension on Monday as the Federal Board of Revenue’s (FBR) IRIS system grapples with a severe technical crisis.
The current deadline of September 30, 2024, is proving challenging for many taxpayers due to ongoing malfunctions within the IRIS online tax filing portal.
The issues, which have been escalating for several days, are not merely minor inconveniences. Tax bar associations across the country have raised urgent complaints, indicating that the system is overwhelmed and largely non-functional. Faraz Fazal Sheikh, president of the Rawalpindi Islamabad Tax Bar Association, pointed out that while simpler returns, such as those for salaried individuals, are being processed, submissions with more complex data consistently fail to upload. This issue has been ongoing for at least two days, resulting in a significant backlog.
According to a report in Business Recorder, the core issues with the IRIS system are both serious and varied:
– System Shutdowns: The system experiences daily outages, often lasting several hours (e.g., from midnight to 4 AM). This intermittent unavailability severely hinders taxpayers’ progress.
– Processing Speed: Even when functional, IRIS suffers from extremely slow processing speeds, making it challenging to navigate and submit returns efficiently.
– Calculation Errors: The system is generating incorrect calculations, particularly concerning minimum tax liabilities. It fails to accurately account for income already taxed under other schemes (such as Association of Persons, AOP, exempt income), resulting in inflated tax bills. This issue has persisted for two years, according to the Pakistan Tax Bar Association (PTBA).
– Data Loss: Taxpayers have reported instances of data disappearing after input, necessitating re-entry of information and wasting considerable time.
– Challans and CPRs: The system is failing to properly register paid challans (tax payment receipts), and information from the Computerized Property Registry (CPR) is often missing from the Management Information System (MIS).
– Non-Resident Data: Wealth data from non-resident taxpayers from the previous year still appears in the system and cannot be edited.
– Inconsistent Requirements: The system is imposing contradictory requirements; for example, it demands profit and loss accounts and balance sheets from individuals with salary income and a single service receipt.
These technical failures are exacerbated by the limited time allotted for filing (only 32 days following the release of the electronic return form via SRO 1321(I)/2024 on August 28, 2024), the complexity of the new tax return forms, and the high volume of returns to process.
The PTBA contends that even if the IRIS system functioned flawlessly, an additional 45 days would be necessary to complete all filings. They, along with other tax bar associations, argue that the current situation infringes upon taxpayers’ fundamental rights to a fair and reasonable opportunity to meet their tax obligations.
In response, they have formally requested a 45-day extension, pushing the deadline to November 15, 2024, to ease the burden on taxpayers and provide the FBR with adequate time to resolve the IRIS issues. This urgent request has been forwarded to the FBR Chairman. The collective plea from the nation’s tax professionals aims to secure an extension to ensure compliance without undue hardship or penalties.
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