Money Matters

The tax fact-book

Money Matters
By Mehtab Haider.
Mon, 09, 20

The Pakistan Tehreek-e-Insaf (PTI) led government launched the sixth consecutive Tax Directory for Parliamentarians for Tax Year 2018 to demonstrate acceptance of the principle “no taxation without representation”.

The Pakistan Tehreek-e-Insaf (PTI) led government launched the sixth consecutive Tax Directory for Parliamentarians for Tax Year 2018 to demonstrate acceptance of the principle “no taxation without representation”.

The elected representatives approve imposition of taxes through money bills so they should contribute and then the people of Pakistan should know how much their representatives paid into the national kitty. Keeping in view this norm, the Pakistan Muslim League-Nawaz (PML-N) led last regime had decided to issue a Tax Directory in 2013 and continued this practice for four years till 2016-17. It is worth praising, the step taken by the PTI led regime that it continued this practice and issued the last two Tax Directories for Tax Year 2017 and now for 2018.

It will only be fair to recall the contribution made by The News Investigative Reporter Umar Cheema who broke stories about tax contributions of Parliamentarians and forced the government to come up with the launching of a Tax Directory on an annual basis.

The launching of Tax Directory also set narratives to focus upon expanding the narrowed tax base. This year, to launch the Tax Directory for 2018, the Federal Board of Revenue (FBR) made another welcoming addition as it came up with tax analysis showing some startling disclosures as the number of return filers for declaring more than six million annual income were just 22,593 or 0.82 percent out of total return filers all over the country.

This chart shows that there are 1,004,221 return filers or 36.6 percent who have shown annual income in the bracket of less than taxable income of Rs400,000 and below. In the bracket of taxable income from Rs400,001 to Rs500,000 on an annual basis, there are 433,133 number of filers or 15.79 percent. In the range of annual income bracket between Rs500,001 and Rs750,000, there are 441,312 return filers or 16.09 percent of total number of return filers. In the income bracket from Rs700,001 to Rs1,500,000, there are 422,349 return filers or 15.4 percent of total return filers.

In the annual income bracket range from Rs1,500,001 to Rs2,500,000, there 153,645 return filers or 5.6 percent of total return filers. In the annual income range from Rs2,500,001 to Rs4,000,000, there are 59,276 return filers of just 2.16 percent of total return filers. In the annual income bracket ranging from Rs4,000,001 to Rs6,000,000, there are a total 21,934 return filers or just 0.80 percent of total filers. In the annual income ranging from Rs6,000,000 and above, there are 22,593 return filers or just 0.82 percent of total number of return filers.

This analysis shows that there is phenomenal level of mis-declaration of real income and assets in the country. The FBR must set some examples at the top in order to place deterrence otherwise the benefits of launching this Tax Directory will not serve any purpose. The followed action is now required under independent National Accountability Bureau (NAB) and FBR.

The Parliamentarians belonging to the Upper House of Parliament (Senate of Pakistan) and Lower House of Parliament (National Assembly) paid almost Rs800 million taxes and almost Rs240 million or close to one third was paid by former prime minister Shahid Khaqan Abbasi as an individual and as part of Association of Person (AOP). There are many wealthy ministers, Punjab chief minister and over four dozen parliamentarians who did not bother to file returns.

The FBR data showed that they did not pay any taxes. Now it will be the test of the anti-corruption watchdog NAB and FBR as well that what kind of punitive action they take against all these non-filers.

Former Prime Minister Shahid Khaqan Abbasi clinched top position by paying highest tax amount of Rs241,329,362 as individual taxpayer and Rs769,169 as AOP among all MNAs.

Prime Minister Imran Khan paid tax amount of Rs282,449 in year 2018, the PML-N’s stalwart and opposition leader Mian Shahbaz Sharif paid tax amount of Rs9,730,545, while Pakistan Peoples’ Party (PPP) leader Asif Ali Zardari paid tax amount of Rs2,891,455.

Punjab Chief Minister Usman Buzdar and Federal Minister for Water Resources Muhammad Faisal Vawda, did not pay any tax amount in Tax Year 2018. Sindh Chief Minister Syed Murad Ali Shah paid tax amount of Rs1,022,184 as individual taxpayer and Rs6,354,761 as AOP. Balochistan Chief Minister Jam Kamal paid tax amount of Rs4,808,948 and Khyber Pakhtunkhwa Chief Minister Mahmood Khan paid Rs235,982 tax.

Advisor to PM on Finance Dr Abdul Hafeez Shaikh said that the 90 senators and 311 parliamentarians paid tax amount of Rs80 crore. The provincial assembly members paid Rs340 million tax amount.

According to analysis done by FBR for Tax Year 2018, there were total 2.8 million tax returns out of which the share of companies for return filing was 1.56 percent, 2.26 percent share of AOPs, 54.06 percent share by non-salaried individuals, and 42.12 percent share by salaried individuals. Punjab’s share in tax collection stood at 34.99 percent, Sindh 44.91 percent, Balochistan 1.67 percent, Khyber Pakhtunkhwa 3.54 percent, Capital Territory 14.77 percent and Gilgit-Baltistan 0.12 percent. The number of filers in Punjab stands at 59.48 percent, Sindh 27.34 percent, Balochistan 1.83 percent, Khyber Pakhtunkhwa 6.01 percent, Capital Territory 5.3 percent, and Gilgit-Baltistan 0.05 percent.

Karachi is on top on account of collecting taxes as the largest hub of economic activities collected Rs209 billion, then Islamabad comes with collection of Rs204 billion, while Lahore stands at third position with a collection of Rs180 billion in tax collection.

PPP leader Bilwal Bhutto Zardari paid tax amount of Rs294,117 and Hamza Shahbaz Sharif Rs8,705,368.

Federal Minister for Information Syed Shibli Faraz paid tax amount of Rs367,460; Foreign Minister Makhdum Shah Mehmood Qureshi paid tax amount of Rs183,900; Makhdum Zain Hussain Qureshi paid zero tax; Federal Minister for Science and Technology paid tax amount of Rs1,698,651 as individual tax payer and Rs75,000 as AOP; Federal Minister for Defense Pervez Khatak Rs1,826,899; Federal Minister Sheryar Afridi Rs183,900, Noor-ul-Haq Qadri paid tax amount of Rs3,506,009 as AOP; Federal Minister for Education Shafqat Mehmood Rs231,730; and Ali Nawaz Awan paid tax amount of Rs228,342.

Federal Minister for Planning Asad Umar paid tax amount of Rs5,346,342; Federal Minister for Aviation Ghulam Sarwar Khan Rs1,046,669 and Federal Minister for Railways Shaikh Rasheed Rs579,011. Further, Federal Minister for Industries Hammad Azhar paid Rs22,445 as individual taxpayer and Rs59,421,700 as AOP. Federal Minister for Economic Affairs Makhdom Khusro Bakhtyar paid tax amount of Rs624,292. Federal Minister for Food Security Fakhar Imam paid tax amount of Rs5,212,137. Federal Minister for Privatisation Mohammad Mian Soomro paid tax amount of Rs38,022. Dr Fehmida Mirza paid tax amount of Rs187,052; Federal Minister for Shipping Rs896,191, and Federal Minister for IT Syed Amin Ul Haq Rs66,749.

The directory showed that Federal Minister for Law Farogh Naseem paid tax amount of Rs35,135,459; Senator Taleh Mehmood of Jamiat Ulema-e-Islam-F paid Rs29,210,399; while Saleem Mandviwala paid Rs1,591,722 as tax amount.

The narrowed tax base of the FBR requires follow-up action and the tax machinery must initiate its action from top so its deterrence can set precedent at the top that will have far reaching impact on other segments of the society.

The writer is a staff member