Karachi, August 28, 2023 – In a remarkable development, a significant surge has been observed in Pakistan’s Active Taxpayers List (ATL), driven by citizens seeking this status to circumvent skyrocketing electricity bills.
The Federal Board of Revenue (FBR), Pakistan’s apex tax agency, released the latest ATL for the tax year 2022 on Monday, revealing a historic high of approximately 4.5 million individuals and businesses on the list. Tax experts attribute this surge to citizens filing annual declarations to avoid higher income tax rates.
In Pakistan, the government has imposed elevated rates of withholding income tax on individuals not on the ATL, essentially incentivizing them to enroll with the tax authorities. Recent electricity bills, which contained substantial tax amounts, particularly for individuals not on the ATL, further encouraged this trend.
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The FBR’s weekly Active Taxpayers List (ATL) update, issued on Monday, encompassed the names of individuals and businesses that filed their returns for the tax year 2022 up to August 27, 2023. The remarkable increase in active taxpayers can be attributed to strategic initiatives that compelled non-compliant entities to become part of the formal tax documentation system. The government’s persistent efforts to foster tax compliance while discouraging non-filers have played a pivotal role in achieving this milestone.
The most recent ATL update, which covered returns submitted up to August 27, 2023, unveiled that the FBR received an impressive 70,000 returns in the previous week. A key factor contributing to this surge in tax return submissions was the implementation of a significant measure through the Finance Act of 2023.
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Being part of the ATL offers several advantages to taxpayers, including reduced income tax rates and specific exemptions from tax payments. This provides strong incentives for more individuals and businesses to participate in the formal tax system.
The substantial increase in the number of active taxpayers marks a positive development for Pakistan’s revenue collection endeavors. By broadening the tax base and ensuring tax compliance, the government aims to achieve a more equitable distribution of the tax burden among citizens and corporations. The revenue generated from these efforts can be channeled towards vital sectors such as healthcare, education, and infrastructure, ultimately benefiting the entire nation.
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The FBR’s consistent drive to promote tax compliance through initiatives like the ATL and digital tax systems has yielded positive results in recent times. These actions have not only contributed to an enhanced tax collection process but have also increased transparency within the tax framework.
Given the FBR’s unwavering commitment to regular ATL updates, it is expected that the number of active taxpayers will continue to rise in the coming months. The government’s dedication to encouraging tax compliance, coupled with effective enforcement measures, is projected to further strengthen Pakistan’s comprehensive tax collection efforts, thereby contributing to the nation’s sustainable economic progress and growth.
