In Pakistan Federal Board of Revenue, (FBR) has established new category of taxpayer presently called Late Filer which has been installed by amending Income Tax Ordinance, 2001 through Finance act 2024. There are important tax planning implications for the taxpayer in this classification in relation to the tax rates and the nature of the transactions. This post clarifies who is considered a late filer in Pakistan, what is the late filer tax rate in Pakistan, and how to check late filer status and what are the ways to avoid late filing fines, etc.
Who is a Late Filer in Pakistan?
A late filer in this context is somebody who does not file income tax returns by the due (or extended) date of filing prescribed by the FBR. For FY 2023-24, the last date was 31 October 2024. You will be considered a late filer in Pakistan if you file your tax after the deadline. Only taxpayers who had obtained their NTN after 30th June, 2024 and filed their Return of Income for 2024-25 can be late filers till they fulfill certain conditions for getting back their status as Active Filer.
Key points about late filers in Pakistan:
- Failing the deadline: You submitted your 2023-24 tax return on or after November 1, 2024.
- New Registrants: If you have an NTN that was issued after 30 June 2024 for participants who have already filed, but would like to become an Active Filer, you cannot become an Active Filer immediately after being registered, even if you have filed your 2024-25 return on time.
- Surcharge Payment:ATL surcharge shall be paid by late filers in order to be listed in the Active Taxpayer List (ATL) which is Rs 1,000 for individuals, Rs 10,000 for Association of Persons (AOPs) and Rs20,000 for companies.
Late Filer Tax Rate in Pakistan
There are consequences of late filing in Pakistan. For example, increased rates of withholding tax on certain types of transactions, such as sale/purchase of immoveable property. Late filers are allotted in Active Taxpayer List after deposit of the surcharge and such rates are higher than the rates at which tax is to be levied on non-filers. Here’s a brief of late filer tax rate for Pakistan:
- Property Transactions: Late filers pay 6% advance tax, while Active Filers pay 3% and non-Filers 10%. Property purchases late filing rates range from 1.5% to 5.5%, higher than Active Filers.
- Capital Gains on Property: A flat 15% tax rate applies to late filers on gains from immovable property acquired after July 1, 2024, regardless of the holding period.
- Other Transactions: Late filers and active filers face similar income tax rates for transactions like banking and vehicle registration, with car registration tax ranging from Rs 7,500 to Rs 250,000.
There is also a minimum penalty of Rs.1,000 per day for late filing and non-filers or late filers who have any further amount to be paid in taxes may also have to bear a default surcharge (interest) of KIBOR plus 3% per quarter.
How to Check Late Filer Status in Pakistan
You can check if you are a late filer or not under Pakistan, by checking your Active Taxpayer List (ATL) status in Pakistan, through the following options:
Online via FBR’s IRIS Portal:
Go to the IRIS Portal (https://iris.fbr.gov.pk) and enter your NTN or your CNIC along with the password.
Visit the ATL status checker – Are you listed as Active Filer, Active (Late Filer) or Inactive Taxpayer?
SMS Verification:
Send your CNIC number to 9966 to get status of your ATL through SMS. This is an easy way to determine if you are a late filer or an Active Filer.
Befiler App or Website:
You can now check your ATL status on third-party platforms such as Befiler. Some of these tools also provide a friendly interface to follow your filer status and get updates about FBR deadlines.
Download ATL List:
Visit the FBR website (www. fbr. gov.pk, download the daily ATL list and find your name or NTN to verify your status.
To get back to Active Filer from Active (Late Filer) status, file your 2024-25 tax return and pay any surcharge by the September 30, 2025, deadline.
Consequences of Late Filing
There are several consequences of late filing as mentioned:
- Penalties: There is a minimum fine of Rs 1,000 for each day of late filing along with fines of Rs 10,000 for a salaried individual and Rs 100,000 for not providing a wealth statement.
- Higher Taxes:Latent file taxpayers will pay higher withholding taxes and capital gains taxes as per above.
- Legal Consequences:Any person who does not file a return may be subject to a fine or imprisonment of not more than one year, or both. It is otherwise somewhere where a return is demanded by a notice from the Commissioner.
- Financial limitations: Holders of these identification cards may also face financial limitations where the number of transactions may be restricted to Eligible Persons only.
How to Avoid Being a Late Filer
To prevent being a late filer and incurring its costs:
- File Early: File your 2024-25 tax return prior to 30 September 2025 in order to achieve Active Filer Status on the ATL issued 1 October 2025.
- NTN Early Registration: If you are a new taxpayer then register for an NTN prior to 1st July 2025 to become eligible for ATL of 2025.
- Pay Surcharges Timely:If you missed the 2023-24 deadline, all you have to do in order to retain ATL status is file and return and pay the ATL surcharge (Rs. 1,000 in the case of individuals).
- Seek Professional Assistance: Take help of tax consultants or use portals such as Befiler or Tax Jurist Pakistan to file correctly and on time.
- Monitor Deadlines: Watch for FBR updates for deadline extension, as the previous 2023-24 deadline was extended to October 31, 2024.
Choosing CBM Consultants to Stay Compliant:
The role played by a CBM Consultants in Pakistan is to save citizens and companies being labelled as a late filer. We handle keeping track of deadlines on FBR’s, follow up appealing time frame reminders not adding anything new here, and also help in sorting all the financial correspondence. Our experts help in preparing and filing your taxes the right way and the right time ensures your name remains in the Active Taxpayer List (ATL), therefore, shielding you from the much higher late filer tax rates as well as penalties. CBM Consultants also offer expert advice for tax planning and compliance management besides defending you in an event of FBR’s notice. In a nutshell, with professional help, you remain in compliance, too, with no unexpected financial burdens and a clear conscience.
Conclusion
It is important for the taxpayer base of Pakistan to comprehend what the late filer is as it will lead to heavy additional tax and penalties. Knowing who is a late filer in Pakistan and the late filer tax rate in Pakistan and knowing how to check late filer status will help you take control of your situation to ensure compliance. Late Filing is better than no filing at all but filing for your 2024-25 tax return on time before 30 September 2025. It can guarantee you lower tax rates and financial benefits as an Active Filer. Leverage the FBR’s IRIS portal, SMS service or apps such as Befiler to manage your tax liabilities and steer away from the dangers of being a late filer in Pakistan.
