Business

Tax return filings in Pakistan surge by 85% in FY24

5.025 million tax returns were filed for the fiscal year 2023-24 so far

Tax return filings in Pakistan surge by 85% in FY24
FBR House in Islamabad
FBR website

The Federal Board of Revenue (FBR) has reported a significant 85% increase in tax return filings due to enforcement measures aimed at improving the reporting system.

As of October 30, 2024, approximately 5.025 million tax returns have been filed for the fiscal year 2023-24 till date, compared to 2.715 million returns filed during the same period last year.

In the entire financial year 2022-23, nearly 6.652 million returns were filed, with about 3.659 million of these being nil returns.

Nil returns, where no tax is owed, have been a major concern for the FBR.

This year, out of the 5 million returns filed, nearly 1.938 million were nil returns, accounting for 38% of all returns.

The FBR's data also shows that taxpayers have submitted PKR 127 billion along with their returns for the current tax year, a substantial increase from the PKR 67.73 billion collected by this time in 2023.

The government's budget for fiscal year 2024-25 aims to collect PKR 12.970 trillion, which is over 40% higher than the target for the previous year.

The FBR managed to collect PKR 9,306 billion in the financial year 2023-24, surpassing the target of PKR 9,252 billion by PKR 54 billion.

Despite these successes, the FBR is likely to miss its October tax revenue target by PKR 80 billion, with expected collections around PKR 900 billion against a target of PKR 980 billion.

This will mark the second month in the current fiscal year that the tax authorities have missed their monthly target.

In response, Pakistan's Prime Minister has recently approved a transformation plan for the FBR, which includes enforcement measures such as abolishing the non-filer category and restructuring non-registered business entities.

Sources indicate that the government will soon issue an ordinance to enforce these measures, aiming to meet the tax collection target of PKR 12.915 billion for fiscal year 2024-25.

Additionally, the Pakistani government has agreed with the International Monetary Fund (IMF) to implement seven new taxation measures during FY25 if revenue collection falls short of the projected target by 1%.

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