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December 19, 2017

Number of companies, associations filing tax returns declines


December 19, 2017

ISLAMABAD: Amid claims by Federal Board of Revenue (FBR) of having registered over 70 percent revenue growth during the four years, the number of individuals, association of persons (AoPs) and companies contributing not a single penny to the national exchequer is also increasing every year, The News has learnt.

As per FBR data available with this scribe, though FBR showed an impressive 19 percent revenue growth in the current year and the number of Income Tax return filers had also risen to 1.2 million as per figures of Tax Year 2016, the number of filers for the current year had declined to 1.07 million with a majority of them not contributing any tax in all categories.

To the dismay of FBR, the number of registered tax-filer companies had also fallen from 32,391 in 2016 to just 3,333 in 2017 as per data available with The News.

A further breakdown of the data reveals that in 2014, 29,528 companies filed IT returns and contributed Rs349 billion to national exchequer. But out of 29,528 companies 14,440 or 48.9 percent (means about half) didn’t pay any tax. Then in 2015 number of companies which filed income tax returns rose to 31,265 and contributed Rs390 billion as tax. The companies which paid zero tax slightly rose as they were 15,506 or 49.6 percent in round figure about 50 percent. Again in 2016, 32,391 companies filed income tax returns and deposited Rs431 billion with the FBR as tax. Again 50 percent of companies didn’t pay any tax. Then came 2017 when all figures went nose dip down. Number of companies which filed tax returns had sharp declined with totaling 3,333 and their contribution fell to Rs168 billion. Companies which did not pay any tax were 2008 or 61 of total companies which filed tax returns.

Then comes category of Association of Persons (AoPs). In 2014 total AOPs were 45,131 and they paid Rs37 billion as tax and 17,128 or 38 percent of total AoPs didn’t pay any tax. Same was the case in 2015 as total 47,895 AoPs paid Rs49 billion and number of companies which didn’t contribute to national exchequer were 18,846 or 37 percent of total companies which paid tax. In 2016, 50,047 companies filed income returns with FBR and contributed Rs54 billion. Out of total 50,047, 18,846 or 38 percent didn’t pay any tax. Year 2017’s figures were surprising as number of AoPs fell to 40,480 and their tax deposited with FBR was Rs64 billion. This year 13,865 or 34 percent don’t pay any tax. Same is the case of individuals as 30 percent of registered individuals didn’t pay any tax.

If looked in detail the documents available with The News showed that number of tax filer companies which didn’t pay a single rupee as tax remained 2008 out of 3,333 companies or 61 percent of total companies. Then comes number of companies which paid tax up to one hundred thousand rupees. They were 252 or 7.6 percent of total registered companies and paid Rs8.2 million as tax. Similarly those which paid tax from five hundred thousand to one million rupees are 118, these are 6.2 percent of total registered companies. These companies paid Rs82.2 million as tax. Companies which paid tax from one million to five million rupees were 223 which makes 6.7 percent of total registered companies with FBR. These companies paid Rs55.6 million as tax. Number of companies which paid tax from five million to ten million are only 81 which are 2.4 percent of registered companies. Their contribution to national kitty was Rs55.5 million. Taxpayer companies in between 10 million to 50 million rupees are 210 or 6.3 percent of registered companies. They paid Rs5.17 billion rupees. Next category is of companies which paid tax in between 50 million and 100 million rupees are just 70 or 2.1 percent of total registered companies which paid Rs4.9 billion. Last category, which paid the highest amount of tax i.e. Rs158.5 billion.

The News tried to know reason for downfall in the registration of companies and AoPs and tax payment and contacted FBR chairman repeatedly but his office never replied.

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