Tax Filers Rise Sharply Across Pakistan

The number of individuals submitting income tax returns in Pakistan has surged by 45 percent, reaching 5.77 million as of September 30, according to data from the Federal Board of Revenue (FBR). This represents a significant increase from 3.98 million returns filed in the same period last year, resulting in an additional 1.79 million returns submitted within a year.

Traders and professionals emerged as the leading group, with tax returns increasing by 60 percent to 3.81 million, up from 2.38 million the previous year. This category, which comprises traders, shopkeepers, professionals, and self-employed individuals, accounted for approximately 80 percent of the total rise in tax returns. Salaried taxpayers submitted around 1.9 million returns, a 22 percent increase from the prior year, while returns from associations of persons grew by 33 percent to 53,756.

The overall tax return submission rate has nearly tripled over the past three years, jumping from 1.92 million returns in September 2023 to the current 5.77 million. Additionally, the number of returns showing income above the taxable threshold has risen by 37 percent to nearly 2.5 million, up from 1.82 million last year. Similarly, the number of taxpayers declaring tax payments has increased by 38 percent to 3.35 million.

Among non-salaried taxpayers, payment filers rose by around 50 percent to 1.75 million. Tax paid through individual returns climbed by 11 percent to Rs. 34.5 billion, while tax paid by associations of persons grew by 16 percent to Rs. 3.7 billion. However, company filings saw a notable decline, with only 7,953 company returns filed by September 30, compared to 11,206 the previous year. Tax paid through company returns also decreased to Rs. 39.1 billion from Rs. 49 billion.

Overall, tax paid through returns amounted to Rs. 77.3 billion, marking a 7 percent decline from Rs. 83.3 billion last year. The Federal Board of Revenue (FBR) has also intensified the utilization of data from banks, property records, vehicle registrations, and withholding statements to identify individuals who possess taxable income but have not submitted their returns. Approximately 39 percent of returns filed this year are nil returns, mirroring the situation from the previous year.