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The National Board of Revenue, or NBR, has got authority to extend timeframe for the submission of both VAT and income tax returns without penalty.
The legislative and parliamentary affairs division under the ministry of law, justice and parliamentary affairs empowered the board by issuing two ordinances on Wednesday.
The ordinance has been promulgated by President Md Abdul Hamid.
The ordinance for the VAT law has been given retrospective effect from April, 1, 2020 while it is March 25, 2020 in case of income tax law.
With the publication of gazette, the NBR will be able to accept VAT and income tax returns even after the expiry of the deadline without imposing any late fees.
However, the two wings of NBR will have to issue separate notices or orders extending the deadline for specific timeline.
"We will extend the time without fine and interest soon. A few more formalities need to be followed before issuance of an order," said Mohammad Masud Sadiq, member of the VAT policy wing of NBR.
Businesses will have to submit VAT returns by the 15th of every month.
Due to COVID-19 pandemic, many businesses failed to meet the deadline for submission of VAT returns for April and May.
There were no provisions in the VAT and income tax law to extend the deadline or waive penalty for the delay in submission of VAT returns.
According to the VAT and Supplementary Duty (amendment) Ordinance-2020, the revenue board, with prior approval of the government, will be able to extend the deadline for submission of VAT returns with exemption from the payment of penalty and interest in extraordinary situations like natural disaster, pandemic, and war.
The revenue board will also be able to extend such deadlines and give exemption with retrospective effect, it said.
The Income Tax (Amendment) Ordinance-2020 also empowered the revenue board to condone the period considering epidemic, pandemic and war.
The NBR will also be able to extend such time limits with prior approval from the government.
Officials said many income taxpayers could not file withholding tax returns, and deposit tax deducted at source within the deadline due to the lockdown.
Taxpayers also require meeting the deadline for making appeal, depositing tax and filing income and tax statements.