ISLAMABAD    -   The Federal Board of Revenue (FBR) on Friday has revealed that number of tax filers has recorded at 2.85 million in tax year 2018.

The FBR has issued Tax Directory Analysis for the tax year 2018. The analysis showed that number of tax filers in Pakistan have increased to 2.85 million in 2018. 

As many as 2.788 million resident and 64,014 non-residents have filed their income tax returns. The breakup showed that 44,609 companies and 64,334 AOP (Association of Person) have filed their income tax returns. 

Meanwhile, around 1.54 million non-salaried individuals and 1.201 million salaried individuals have filed their income tax returns in year 2018.

The Tax Directory Analysis showed that 44.91 per cent of the overall tax collection is accumulated from Sindh and 34.99 per cent from Punjab. Similarly, 3.54 per cent tax is collected from Khyber Pakhtunkhwa, 1.67 percent from Balochistan, 0.12 per cent from Gilgit Baltistan.

Meanwhile, 14.77 per cent of the tax collection is made from the federal capital territory.

The provincial breakup of income tax filers showed that 1.696 million are from Punjab, which is 59.48 per cent of the overall figure.

Meanwhile, 779,771 people have filed their income returns from Sindh, 52,101 from Balochistan, 171,303 from Khyber Pakhtunkhawa, 151,204 from federal capital territory and 1437 from Gilgit Baltistan. According to the analysis, 36.6 per cent (or one million people) of the overall tax filers are in the income slab of Rs 400,000 and below. As many as 15.79 per cent (or 433,144) are in income slab of Rs 400,000 to Rs 500,000. Around 16.09 per cent are in income slab of Rs 500,000 to Rs700,000.

Meanwhile, 15.04 per cent are income slab of Rs 700,001 to Rs 1,500,000 and 5.6 per cent are in slab of Rs.1,500,001 to Rs.2,500,000. Around 2.16 percent are in slab of Rs.2,500,001 to Rs.4,000,000, 0.8 per cent are in slab of Rs.4,000,001 to Rs.6,000,000 and 0.82 percent are in income slab of Rs.6,000,000 and above. Meanwhile, 6.74 per cent of the income tax filers are from final or fixed tax regime.

Tax Audit

Meanwhile, ceremony for Parametric computer balloting as per the Audit Policy, 2019 for selection of cases for audit for Tax Year 2018 in respect of persons or classes of persons falling under all or any of the three domestic Federal Tax Statutes i.e. Income Tax Ordinance 2001, Sales Tax Act 1990, and Federal Excise Act 2005 was held at Federal Board of Revenue, Headquarter, Islamabad.

On this occasion, Advisor to the Prime Minister on Finance & Revenue, Dr. Abdul Hafeez Shaikh, representatives of Federation of Pakistan Chambers of Commerce & Industry (FPCCI), Institute of Chartered Accountants of Pakistan (ICAP), Pakistan Tax Bar Association (PTBA), Islamabad Chamber of Commerce & Industry, Islamabad Women Chamber of Commerce & Industry, Rawalpindi Chamber of Commerce & Industry, All Pakistan Tax Advisors Association and FBR’s Officers were present.

The criteria for selection of cases (for all taxes) for Tax Year 2018 is risk based and parametric. Cases have been selected on scientific approach for which a software has been designed and put in place named as “Risk Based Audit Management System” (RAMS). This software empowers Federal Board of Revenue to focus on non compliant taxpayers and thus facilitate compliant taxpayers helping build confidence of taxpayers in the Audit system.

Chairman FBR Muhammad Javed Ghani said that FBR is working on the principles of transparency, simplicity and predictability and informed that certain categories of the taxpayers are excluded from selection i.e. those picked up for investigations by FBR Intelligence & Investigations Wing, all cases where income chargeable to tax under the head salary and /or pension exceeds 50 per cent of taxable income, except cases having business income. Directors of companies do not qualify for this exclusion. All cases where entire income is covered under Final Tax Regime (FTR), all cases where declaration has been made under the Voluntary Declaration of Domestic Assets Act, 2018, all cases where declaration has been made under the Asset Declaration Ordinance, 2019 and Federal, Provincial and Local Government Departments, have also been excluded.

The Advisor to the Prime Minister on Finance and Revenue, Dr. Abdul Hafeez Shaikh in his address to the participants of ceremony said that the selection of audit cases would be computerized and on risk basis.

The advisor also explain that minimum number of cases are being selected for audit by focusing on only high-risk Income tax, Sales tax and FED cases so that audit cases should be completed appropriately and within time. This will also help in reducing the complaints of taxpayers about harassment and corruption.

In addition to this, the exclusions in Audit Policy will minimize the undue hardships faced by taxpayers.

Dr. Abdul Hafeez Shaikh also hoped that FBR will continue to improve its standards by providing services to both the government departments and the taxpayers. Against this backdrop, FBR has published Annual Tax Directories 2018 which contains the tax details of common taxpayers and members of the Senate of Pakistan, National as well as Provincial Assemblies so that people of Pakistan can access information.

He further added that this time no new tax has been imposed under current Budget to provide relief.

The Advisor assured the business community of his full support and expressed hope that the future is more promising for Pakistan’s Business sector. For this, government has also provided subsidies to Export Sector. FBR has taken initiative to sanction more sales Tax refunds this year than in previous year.

For this, FBR has introduced the online FASTER system so that refund claims are processed without involvement of tax officials. In order to further build up the taxpayers confidence, two committees are constituted for redressal of complaints against FBR comprising of Business Committee including representatives of FBR and Business individuals and Technical Committee for complaints about refund matters that would also include representatives from private sector.

In order to carry out parametric computer balloting, Mr. Abdul Hafeez Sheikh, Advisor to the Prime Minister on Finance and Revenue, initiated the ballot process by pressing the computer button for Income Tax Cases, Muhammad Javed Ghani Chairman FBR pressed button for Sales Tax and Mr. Aftab Hussain Nagra, President Pakistan Tax Bar Association pressed the button for Federal Excise Duty, Resultantly, the cases were selected for audit for Tax Year 2018.  

The number of cases selected for audit in a totally transparent manner in respect of different categories are detailed as under:

Income Tax (Corporate/Non-Corporate) - 10,444. Sales Tax (Corporate/Non-Corporate)- 2,065. Federal Excise Duty(Corporate/Non-Corporate)- 27 and total 12,553.

Keeping in view the facilitation of taxpayers, this year lesser number of cases have been picked up when compared with previous years. National Tax Numbers/ CNIC’s of cases selected for audit have been displayed on the official website of FBR.