Taxpayers in Pakistan cross 6 million for first time

The number of active taxpayers in Pakistan has crossed six million for the first time after the government announced harsh measures to increase documentation of the economy.

The country's tax collection authority — the Federal Board of Revenue — shared on Monday that active taxpayers had reached 6.07 million, comfortably passing the November mark of 5.34 million payers, an increase of nearly 13.6% within a month.

The rise in the Active Taxpayer List was mostly because of the FBR's steps to deal harshly with non-filers, preventing them from conducting financial transactions freely. The first step was to block sims of individuals who filed tax returns in 2022-23 but did not file them in 2023-24.

Moreover, the government's new plan which would be the doomsday for non-filers would prohibit them from buying motor vehicles, properties and maintaining bank accounts.

The laws, when approved, would be a drastic blow for non-filers as their accounts may be frozen . Moreover, they would be unable to buy and sell securities or government bonds for investment purposes.

This rise in the number of active taxpayers is attributed to several contributing factors.

Sources within the FBR shared that one of the primary motivators for citizens filing their income tax returns is the looming restrictions on various financial transactions for non-filers.

In order to incentivize timely filing, the FBR has introduced stringent penalties for non-compliance. These penalties include the disconnection of mobile phone SIM cards, suspension of utility services, and restrictions on foreign travel. However, exemptions exist for certain groups such as overseas Pakistanis holding National Identity Cards for Overseas Pakistanis (NICOPs), minors, students, and individuals traveling abroad for religious purposes, such as Hajj or Umrah.

Further legislative measures are also in the pipeline. The FBR is working with the National Assembly on the Tax Laws (Amendment) Bill, 2024. This bill aims to close existing loopholes, broaden the tax base, and enhance revenue collection.

Recently, the Election Commission of Pakistan suspended the membership of 139 members of parliament from the Senate, National Assembly, and all four provincial assemblies for not submitting their wealth statements.