LAHORE: The Federal Board of Revenue (FBR) is also going to miss its annual tax collection target by a wide margin and the International Monetary Fund (IMF) has agreed to reduce the target by about Rs263 billion, said the sources.
In an alarming development, the number of active taxpayers has declined by 30% or 935,000 to just under 2.2 million, showed the new Active Taxpayers List that the Federal Board of Revenue (FBR) released on Monday.
The 2.2 million tax return filers were just one-third of those who have valid National Tax Numbers (NTNs) and are doing business in Pakistan but did not submit their tax returns, indicating the FBR’s failure to enforce laws.
It means that two out of every three persons who have a valid NTN and are doing business did not submit their annual income tax returns.
For tax year 2020, the names of 2.178 million individuals and companies have been included in the Active Taxpayers List (ATL) 2021, according to the list that the FBR released on Monday.
The ATL 2021 has replaced the ATL 2020 that carried names of 3.12 million individuals and companies. A comparison of both the lists showed that over 932,000 names were missing from the new list.
Under the tax laws, the persons and companies that are on the active list are entitled to the standard income tax rates and those who are not on the list have to pay double the standard rates on business transactions and various activities like buying a car.
It is a matter of concern that people are ready to pay 100% more tax on a business or personal economic activity but are not willing to become part of the tax system.
“Around 500,000 persons who filed returns last year did not file the tax returns this year,” said FBR spokesman Syed Nadeem Rizvi.
He said that another about 500,000 persons filed returns after due date but did not pay fines, thus, their names could not be included in the ATL.
The spokesman said that more than 75,000 were new filers this year.
Among the reasons why people are shying away from filing annual tax returns is that they are scared of FBR’s highhandedness, according to businessmen and various tax and legal consultants.
The FBR on Monday notified new guidelines to protect those taxpayers who lodged corruption complaints against FBR officers.