E-filing of Taxes in Federal Bureau of Revenue Pakistan

What is e-service & e-filing? Introduction to e-filing in Pakistan Users of e-filing E-enrollment procedure E-filing procedure Benefits of e-filing

What is E-Service and E-filing?

E-Service is simply a way to serve your documents using internet and taxes online system. It saves time and, quite often, a significant amount of money over traditional methods.

E-filing is an electronic facility provided by the FBR to the taxpayers to file income tax returns/statements.

Short Introduction:

When the government started an information-technology (IT) and e-commerce initiative in early 2000, its basics aim was to help public sector organizations in increasing efficiency, effectiveness and responsiveness with the use of Information and Communication Technology. It focused Infrastructure development of government departments and thus facilitating common public in using services of different government department easily. Devolving e-filing system for FBR was also one of early and major projects.

In December 2005 the Central Board of Revenue, the tax authority officially started allowing electronic filing of sales tax and federal excise returns by registered private and public companies. At that time, it said that it expected about 1,500 large taxpayers out of 22,000 to use the facility. Now with the help of e-filing system and other policies FBR has successfully increased the tax net to great ranges.

Major Functions performed by FBR by help of E-filing:

Issuance of NTN and sales tax numbers

Collection of Sales Tax, Income tax and property tax

Keeping record of taxpayers and sharing it with relevant parties

Issuing active taxpayers list more easily and effectively

Users of E-filing:

Following are the legal entities that can avail e-filing service (provided that it fulfills the requirements of FBR)

AOP (Association of Persons) Company Individual

AOP (Association of Persons) is defined in law as a firm, a Hindu undivided family, any artificial juridical person or anybody of persons formed under foreign law.

An Individual is a person who is resident of Pakistan or non-resident if he is fulfilling criteria of Law.

A company is a legal entity formed to carry a business for profit and that is registered under company ordinance 1984.

The board has further clarified that e-filing mode for the submission of income tax returns is required only for individuals and companies with whose declared income is Rs 500,000 or more per annum and not for ordinary traders and individuals whose income falls below the criteria.

e-Enrollment Procedure:

To begin e-Filing CBR Returns and Statements enrollment is necessary. Earlier individuals, companies, and AOP’s had to enroll themselves manually but after introduction of e-filing system, now there is a facility of e-enrollment.

How to do Individual e-Enrolment

1. Entering your NTN number

2. Enter CNIC as it is printed on NTN Certificate

3. Enter Secret Digits as it is given in Graphic Image at e-Enrolment Page.

After completion of e-Enrolment process User-ID and Password is issued to applicant.

How to do Individual e-Enrolment

Following information is required to e-enrollment of company:

Company NTN

Registration number

Director NTN

After completing the e-Enrollment Process in signed and Stamped Form can be faxed. Thereafter you will be issued User-ID and Password for e-Filing.

E-filing Procedure:

After completing the enrollment procedure, we have to activate and verify our account. Once the account is activated, we can move on to e-filing step.

1. Open FBR website and enter user id and password which we gained during enrollment procedure.

2. After successful, we ll get number of options that were not earlier available and are available only to those have a valid user id and password.

3. Here we can file tax returns in two modes;

E-file in online mode by remaining online and connected to the FBR website

Download excel file, fill it in offline mode, and later upload it.. this method is specially for those who have low speed internet connections.

4. Whatever mode we choose, we have to fill the same form, though there is some difference of steps.

5. After we have calculated our tax and filled it we verify our prepared return.

6. After successful verification we ll get option of e-payment or manual payment, which we can select according to our ease.

7. If we select e-payment methods, we have to fill bank and account information. Once we complete it we get a submit button and pressing it completes the e-filing process.

8. We get acknowledgement slip button, pressing which will generate acknowledgement slip, which we can print and use as a evidence of tax payment.

Benefits of E-filing:

These are the benefits of e-filing:

Convenience: You can electronically file 24 hours a day, 7 days a week.

Security: Your tax return information is encrypted and transmitted over secure lines to ensure confidentiality.

Accuracy: Electronic filed returns have 13 percent fewer errors than paper returns.

Proof of Filing: An acknowledgment is issued when your return is received and accepted.

Direct Deposit: You can have your refund direct deposited into your bank account.

There are number of targets which have been achieved by using e-filing system and e-filing system has facilitated different government departments, agencies as well as common users in number of ways. Now different Government institutions can better use information collected by e-filing system to their benefit, they have more effective, efficient and time saving way of communicating and working with each other. Thus it increases responsiveness of Government sector in delivering public services. Apart from that it also bring Government close to citizen by providing them with easier access to information through personnel computers, internet, fax and other communication services.

References:

www.fbr.gov.pk

Income Tax ordinance

Business recorder article

E-filing Department, FBR Multan

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