More than 4 Million Individuals have Filed Income Tax Returns

ISLAMABAD: As per the Active Taxpayers List, the current count of individuals with submitted income tax returns exceeds 4 million, with a projected potential increase to 4.5 million.

Asif S. Kasbati, a renowned tax expert and member of both the Pakistan Business Council Core Tax Committee and ICAP Fiscal Laws Committee, has shared some insightful observations. According to Kasbati, the latest Federal Board of Revenue (FBR) statistics indicate that the number of individuals included in the Active Taxpayers List (ATL) for Tax Year (TY) 2022 has exceeded 4 million up to 27 June 2023. However, he further adds that the ATL figure is expected to rise and reach 4.5 million by 30 September. Kasbati’s insights provide an overview of the current scenario and expected developments in the ATL count.

In discussions with Asif S. Kasbati, the point was raised that the Active Taxpayers List witnessed a significant increase over the years. For TY 2018, the ATL stood at 1.8 million, which then reached 2.4 million for TY 2019. By 20 September 2022, the ATL figure had further risen to 2.9 million by TY 2020.

During discussions, Kasbati shared that the Active Taxpayers List (ATL), which was released on 12 December 2022, contained details of 3.83 million tax filers for the Tax Year 2021. He also mentioned taking into consideration the past monthly progress and predicted that the number of taxpayers would reach 4 million as of 28 February 2023.

The prominent tax advisor highlighted that the Federal Board of Revenue had made a commitment to register an additional 300,000 taxpayers. However, this figure has been deemed by some experts as unattainable.

However, Kasbati’s study suggests that there will be a considerable surge in the Active Taxpayers List (ATL) for the tax year 2022, with the number of taxpayers projected to be around 4.5 million compared to 4 million in 2021. His forecast takes into account the usual monthly progression rate of 3%, which has been observed in the past.

By employing various strategies such as data mining of withholding taxes, collaborating with entities like National Database and Registration Authority (NADRA) and Provincial Revenue Authorities for Motor Vehicles and Properties, and working towards incorporating a greater number of Non-Tier 1 traders within the taxation system, Federal Board of Revenue has the potential to achieve the goal of reaching 4.5 million taxpayers on the Active Taxpayers List (ATL) ahead of schedule. These measures aim to expand the tax base and contribute to the early attainment of the set goal.

Kasbati highlights that a considerable number of individuals file tax returns primarily to secure a place on the Active Taxpayers List (ATL), rather than fulfilling their tax payment obligations. Consequently, it is imperative for the FBR to ascertain the actual number of taxpayers who genuinely contribute to tax revenues. Kasbati recalled that the FBR had previously published an “Directory of Income Tax Filers with Individual Tax Payments” which proved advantageous in promoting transparency and enabling accurate assessment of tax payments.