ISLAMABAD: Federal Board of Revenue (FBR) has issued names of 1.26 million taxpayers who filed income tax returns for tax year 2017.
According to the latest FBR’s Active Taxpayers List (ATL), about 160,000 taxpayers become non-filers and will be deprived of availing the benefit of lower withholding tax rates.
The FBR issues ATL on March 1 every year of those taxpayers who filed their returns during the preceding tax year. The appearance of taxpayer names is mandatory for availing the reduced rate of withholding tax applicable on various transactions including bank, properties, sale/purchase of securities, motor vehicles etc.
The number of return filers was 1.01 million when FBR issued ATL last year, which shows growth in return filers at 25 percent. However, the return filers for tax year 2016 increased up to February 28 to 1.42 million, showing 0.41 million more returns filed after issuance of previous ATL.
In 2007, 2.1 million people filed their income tax returns. In 2013, when the PML-N came into power, active taxpayers in Pakistan were only 935,776, which gradually increased to 1.391 million last year.
A recent FBR report, submitted to the Senate Standing Committee on Finance, revealed that only the salaried was allowing FBR to save face. Excluding the salaried class, the number of return filers from the other 35 sectors of the economy has actually decreased over the previous five years.
In June 2013, the government had introduced the policy of charging higher tax rates from those who do not file their income tax returns. It imposed 0.6% withholding tax on all banking transactions carried out by non-filers. Eventually, it lowered the rate to 0.4% while succumbing to pressure exerted by the trading community. It is also charging 0.6% withholding tax on cash withdrawals from banks by non-filers.
However, the FBR’s own statistics showed that out of 48 main withholding taxes, 94% withholding tax revenue was generated only on account of 10 traditional sources like contracts, imports, telephone bills and salaries etcetera.
