The cost of being Non-filer

Unfortunately, Pakistan has the lowest ratio of income tax payers among many other countries. As only 1% population of Pakistan is a tax payer as recent statistics of Federal Board of Revenue show that only 1.42 million people are paying their taxes. The federal government is trying to increase the tax payer ratio in the annual budget since 2013.

In order to convert non-filer to filer, Finance Act 2014 is introduced to penalize the non-filers by compelling them to become tax payers.

A Filer is the person who files his/her income tax return annually. As per Section 2(23), a filers is one whose name appears in the Active Tax Payer list (ATL) issue by FBR.

Tax law regards the taxation and distribution of Tax Return as two separate activities – a concept that is not generally accepted by most people. Paying or deducting a tax does not remove a person from the official and prescribed tax return filing system, so one cannot be a file unless one person submits their Income Return. For example, a tax deduction by an employer does not cause him to lose his job and similarly withholding tax from good management does not prevent the supplier from filing a tax return. Similarly, a person may not be required to pay taxes but still have to file a tax return.

Completion of annual tax refunds is compulsory for people with a National Tax Number (NTN), who have been taxed during the last two years, their annual turnover is more than 4,000 square feet, with 2000 square feet of apartments or a 250 square foot building, who use commercial power / industrialist charged Rs. five lacs or more, owning 1000 cc or more of the vehicle or those notified by Tax authorities to return it.

The delay in the tax statement attracts penalties and daily taxes for taxpayers. Failure to file a tax statement attracts consistent fines, provides non-filers and explains the different tax administration in the form of higher taxes, higher vehicle registration and token taxes, higher bond tax, higher income tax and divorce, higher tax deduction, higher income tax of capital, high taxes on the sale and purchase of goods and commissions, etc. They are not a filer and are not entitled to seek a refund of taxes paid at the time of the purchase of the car and property from the person who is not liable to pay taxes as Pakistan does not reside.

Recently, the Finance Bill – 2018 is increasingly raising awareness of the ban on non-users to buy or import a car. This has already been done and informed by local car manufacturers. Budget 2018-19 lifted the ban on non-filers purchasing property of their value above Rs. Four million.

These compelling measures require the filing of compensation for people who are not required to pay tax such as immigration, non-Pakistani people, retired workers and people who earn less than a year. Expatriates often buy properties in Pakistan and retired people make money by exchanging shares, thanking the National Savings Trends and buying bond bonds. They also needed to buy, to withdraw money from their bank accounts. They are available and will receive Non-filer treatment if they do not.

These days, because of the advanced areas of Information Technology (IT), it’s not too difficult to be a file director or submit an annual tax statement. The FBR, at this juncture, was introduced by many institutions that support people to easily file tax and file files. FBR performs numerous promotions on printed and electronic media data and teaches people how and when to file a file or file tax return.

If you want to become filer, please visit 'How to become Filer'

An individual must be registered and have a National Tax Number (NTN) before filing a tax return or registration on the ATL. Registration and access to NTN can be done by visiting the website “iris.fbr.gov.pk” without visiting the tax office. Similarly, the word recognition site in ATL is now available through SMS and the website. ATL typing is followed by one space with CNIC No. and send it to 9966 to indicate whether the name is available in ATL or not. The same can also be checked by visiting the website www.fbr.gov.pk.