ISLAMABAD: As per the Active Taxpayers List (ATL), the latest number of income tax return filers stands at 4.2 million in the country. The Federal Board of Revenue (FBR) expects that the number of taxpayers will reach 5 million by February 2024, or possibly even earlier, based on its efforts.
This figure has been on the rise over the years, with 1.8 million for Tax Year 2018, 2.4 million for Tax Year 2019, 2.9 million for Tax Year 2020, and 4 million for Tax Year 2021.
The increase in taxpayers is attributed to higher withholding tax rates implemented through the Finance Act 2023. To be listed under the Active Taxpayer’s List, non-filers must file their first return for Tax Year 2023 and pay a penalty of Rs 1,000 to open the last year’s IRIS return filing window. They also need to file their return to avoid higher withholding tax rates.
The process of broadening the tax base includes data mining of withholding taxes and coordination with NADRA for Family Tree/Provisional Assessment, as well as analysis of SECP companies’ data. Additionally, there is coordination with Provincial Revenue Authorities of Properties & Motor Vehicles and efforts to bring maximum big retailers into the tax net.
Senior tax expert Asif S Kasbati, a member of the ICAP Fiscal Laws/Income Tax Committee and PBC Core Tax Committee, analyzed that for Tax Year 2022, there would be approximately 4.5 million taxpayers on the ATL. This number marks a significant increase compared to 4 million taxpayers in 2021.
He suggested that FBR should analyze how many taxpayers are actually paying taxes in the country. Some individuals might file returns only to remain on the ATL without paying substantial income tax. He emphasized publishing tax details directories for taxpayers, similar to what was done a few years ago.
