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September 19, 2020

Sindh tops FBR’s revenue collectors

Business

September 19, 2020

KARACHI: Sindh has emerged as the top revenue spinner for the Federal Board of Revenue (FBR) for the tax year 2018, while Punjab took the lead by number of tax returns, an official document showed on Friday.

The FBR’s annual tax directory showed that Sindh contributed 45 percent to the revenue, followed by Punjab 35 percent, Islamabad Capita Territory 14.8 percent, Khyber Pakhtunkhwa 3.6 percent and Balochistan 1.8 percent. Gilgit Baltistan had a nominal share of 0.12 percent.

Karachi, the financial hub of the country, contributed Rs395 billion in income taxes, 26 percent of the total direct taxes collected during the year.

FBR’s total collection during the tax year 2018 amounted to Rs3.8 trillion.

Around 2.85 million tax returns were filed during the year. Of that, 1.69 million income tax returns were filed from Punjab, making 59.5 percent of the total returns. Taxpayers in Sindh filed 779,771, or 27.34 percent of tax returns. Taxpayers in Khyber Pakhtunkhwa, Islamabad Capital Territory and Balochistan filed 171,303, 151,204 and 52,101 returns, respectively.

The FBR has been issuing tax directory since tax year 2013. The directory contains name and tax payment by taxpayers. These taxpayers include members of national and provincial assemblies and senate. Besides, it also has information about individuals and corporate entities, who contribute to the revenue during a year.

The breakup of tax filers revealed that around 44,610 income tax returns were filed by corporate entities for the tax year 2018. The number of registered companies with the Securities and Exchange Commission of Pakistan (SECP) was 87,622 in 2018. Every entity registered with the SECP is required to file an annual income tax return irrespective of profit or loss.

The major chunk in returns filing was from non-salaried and salaried individuals, who filed 1.52 million and 1.2 million returns, respectively. Meanwhile, the number of return filers by association of persons was 64,336.

The FBR data showed 64,014 tax returns were filed by non-resident Pakistanis.

Overall, majority of return filers had income below the threshold.

The FBR said highest number of returns –1 million – filed by individuals whose income was Rs400,000 and below, which was around 37 percent of the total return filed during the year. The drive to encourage returns filing was launched in the previous government to prevent tax evasion and avoidance. With ease in process of tax filing over the period, taxpayers are increasingly encouraged to record their annual income, expenditures and paid taxes.