By Staff Reporter
ISLAMABAD: The government delayed the income tax return filing deadline to Oct. 31, giving taxpayers extra time to comply after bank closures tied to the Shanghai Cooperation Organisation (SCO) summit hindered submissions.
“The FBR (Federal Board of Revenue) made the decision in view of requests from various trade bodies, Tax Bar Associations and the general public,” tax authorities said in a notification.
The original deadline was September 30, but the FBR granted a two-week extension last month.
The previous deadline was Oct. 14, but banks in Islamabad and Rawalpindi were closed for three days due to the SCO summit, causing difficulties for taxpayers, FBR Chairman Rashid Mahmood Langrial said.
Pakistan, with one of the world’s lowest tax ratios, aims to collect $46 billion in taxes this financial year. The country has identified 4.9 million taxable individuals using modern technology.
Finance Minister Muhammad Aurangzeb said last month that tax filers had nearly doubled to 3.2 million from 1.6 million last year. “We recorded 300,000 new tax filers last year, while this year, the figure has already swelled to 723,000.”
As of Oct. 14, the FBR received 4.537 million income tax returns, up 107.83 percent from the same period last year. New return filers rose to 1.059 million between July 1, 2023, and Oct. 14, 2024.
However, nil-filers increased sharply in tax year 2024, with 1.679 million nil-returns accounting for 37 percent of all returns submitted.
To address this, the government plans to eliminate non-filer and notional-filer categories. Notional filers submit returns solely to qualify for reduced tax rates without paying taxes.
Tax payments associated with returns for tax year 2024 reached Rs119.077 billion by Oct. 14, up 128 percent from the same period last year.
The International Monetary Fund (IMF) last month approved a $7 billion loan for Pakistan, critical for the South Asian country to meet its external financial obligations and strengthen its national currency. One of the key demands of the IMF from Pakistan has been to improve its tax administration and broaden its tax base.
The South Asian country aims to collect an ambitious $46 billion through taxes this financial year. Authorities have identified 4.9 million taxable persons in the country by using modern technology.
In Sept., Finance Minister Muhammad Aurangzeb announced the country’s tax filers this year had almost doubled from 1.6 million last year to 3.2 million. He also disclosed that last year Pakistan recorded at least 300,000 new tax filers while this year, the figure had already swelled to 723,000.
As of October 14, the FBR received 4.537 million income tax returns, compared to 2.183m during the same period last year, showing an increase of 107.83 per cent. For the tax year 2023, the FBR received a total of 6.464m returns. To reach last year’s level, it anticipates an additional 1.927m returns.
Preliminary data shows that from July 1, 2023 to October 14, 2024, the FBR received 1.059m new return filers who enrolled in the tax system, with 463,029 new filers added between July 1, 2023 and October 14, 2024.
While the total number of returns has significantly increased compared to last year, the proportion of nil-filers has also risen sharply in tax year 2024. Nil-returns are often submitted for one-time financial transactions or to benefit from lower tax rates for placement on the Active Taxpayers List (ATL).
From July 1, 2024 to October 14, 2024, there were 1.679m nil-filers, accounting for 37pc of all returns submitted during this period. In tax year 2023, there were 783,816 nil-filers, representing 35.86pc of total returns filed (2.183m).
In total, the 2023 tax year saw 6.464m returns filed, of which 3.508m were nil-returns, comprising 54.26pc of the total. Further analysis shows that from July 1, 2023 to October 14, 2024, the number of new return filers was 1.059m, with 636,961 classified as nil-filers. The trend continued in tax year 2024, with 463,029 new returns filed since July 1, 2024, of which 315,650 were nil-returns.
To address this trend, the government has decided to eliminate both the non-filer and notional-filer categories (nil-filers). Notional filers submit returns solely to qualify for reduced tax rates, despite not paying any taxes, making it challenging for the government to identify individuals evading tax payments.
Tax payments associated with returns for tax year 2024 reached Rs119.077 billion by October 14, compared to Rs52.202bn in the same period last year, showing a 128pc increase. This substantial payment helped the FBR meet its revenue collection target for September 2024.
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