43pc INGOs not on tax roll

ISLAMABAD: While in Pakistan, International Non-Governmental Organisations (INGOs) do what Pakistanis do as majority of them are either not registered for National Tax Number or don’t file tax returns.
Some of the INGOs file the tax returns but declare nil income. As far as INGOs are concerned, they have been at the government’s radar for quite some time. There are around 150 INGOs registered with Economic Affairs Division (EAD) and Federal Board of Revenue (FBR) was asked to check the tax status of 125 of them.
Result was mind boggling. Tax authorities found that 43 percent of INGOs were not on tax roll, to begin with. Among the remaining 57 percent, half of them don’t file tax returns. Now they are requesting the revision of tax returns amid probing questions from EAD where they are to revise their MoUs, it has been learnt.
The FBR officers have so far shown no flexibility over pending requests for the revision whereas notices have been served on the non-filers and physical inspection have been carried out of the INGOs offices not on the tax roll.
Although INGOs generally manage to get tax exemptions as they do non-profit activities, filing tax returns make it mandatory for them to deposit the withholding tax deducted on staff salary and other purchase. Besides, they have to submit their annual accounts registering details of their activities and expenses incurred.
It may surprise many that INGOs like International Republican Institute and National Democratic Institute among others operate without registering for NTN, let alone submitting annual account statement and depositing withholding taxes.
Likewise, there are organisations which acquired NTNs but don’t bother to file tax returns. Out of 73 INGOs bearing NTNs, half of them don’t file tax returns.‘The News’ consulted tax directory to determine the tax filing INGOs. Those which wereconspicuous by their absence from the directory (meaning thereby non-filers) are big names like Asia Foundation, Friendrich Ebert Stiftung, Save the Children (International), Basic Human Rights, Democracy Reporting International, Heinrich Boll Foundation, International Rescue Committee and others.
The INGOs that filed tax returns included Oxfam, Friedrich Naumann Stiftung, Save the Children (USA), Pak-Turk International School, Medicines Sans Frontiers (France), Water Aid, Action Aid, Agha Khan Development Network, International Crisis Group, Medicines Sans Frontiers (Holland), Qatar Charity, Norwegian Church Aid, Path Finder, Democracy Reporting International, Muslim Hands, Japan Emergency and Care International.
Nevertheless, many such INGOs have been spotted which filed tax returns but declared zero income as if they operate without money. They are presently being scrutinised.The FBR has been working on INGOs since April in order to streamline their tax affairs. The investigators were shocked to find out leading names in this field out of tax roll. Those obtained NTNs didn’t set good examples either as they are in the practice of sharing scant details about their operations and funds.
International Tax Policy wing of the FBR is currently dealing with the case. Its officials privy to details say that RTO Islamabad have served notices on many INGOs depending on their tax status.
Those not registered have been directed to obtain NTN and submit their legal status.The INGOs acquired NTNs have been asked to file tax returns, deposit withholding tax and provide the statement of accounts as well as details of operational expenses.