Government Proposes Massive Increase in Late Tax Return Filing Fee Under Finance Bill 2026
Islamabad: The federal government has proposed a substantial increase in the fee for taxpayers seeking reinstatement to the Active Taxpayers List (ATL) after filing their income tax returns late.
Under the Finance Bill 2026, the fee for individual taxpayers would rise from Rs1,000 to Rs25,000, representing an increase of Rs24,000, or 2,400 percent.
The proposed amendment to Section 182A of the Income Tax Ordinance, 2001 aims to encourage timely submission of tax returns and improve tax compliance.
According to the bill, the ATL restoration fee for Associations of Persons (AOPs) would increase from Rs10,000 to Rs50,000, while companies would be required to pay Rs100,000 instead of the current Rs20,000.
The Active Taxpayers List includes individuals and entities that file their income tax returns within the prescribed deadline. Taxpayers who fail to submit returns on time are removed from the list and face higher withholding tax rates on various transactions, including banking activities, property purchases, vehicle registrations, and overseas travel.
The government maintains that the existing fee structure has not been effective in discouraging late filing, prompting the proposal for a significant increase to promote timely tax compliance.
If approved by Parliament, the revised ATL restoration fees will come into effect on July 1, 2026, making delayed tax return filing considerably more expensive for both individuals and businesses.
