Karachi, May 6, 2024 – The Federal Board of Revenue (FBR) has reported a record surge in active taxpayer registrations this week, with 110,000 new sign-ups, bringing the total to 4.18 million for the 2023 tax year.
This unprecedented increase comes amid looming threats of SIM card blocking for non-compliant citizens.
The influx in registrations was catalyzed by the FBR’s recent directive, as stipulated in Income Tax General Order No. 1 issued on April 29, 2024, which targets over half a million non-filers. The order compels telecommunications companies to block the SIMs of those who have neglected their fiscal responsibilities by failing to file their income tax returns and wealth statements for 2023.
The FBR’s tough stance is part of a broader strategy to expand Pakistan’s tax base, which is crucial for enhancing the country’s tax-to-GDP ratio—a key indicator of fiscal health and economic efficiency. This move has significantly contributed to the growth in the Active Taxpayers List (ATL) from 3.35 million in March to 4.18 million by May.
By making tax compliance a prerequisite for mobile connectivity, the FBR has effectively incentivized taxpayers to regularize their status. Inclusion in the ATL not only averts the inconvenience of disabled SIM cards but also qualifies individuals for reduced tax rates on various financial transactions, further encouraging compliance.
Despite this progress, the gap between the active taxpayer base and Pakistan’s total population of 240 million highlights the ongoing challenges in achieving comprehensive tax coverage. To address these challenges, the FBR is intensifying its outreach through awareness campaigns, simplifying tax procedures, and bolstering digital infrastructure to ease the compliance process.
Officials at the FBR believe that these proactive measures are foundational for nurturing a robust compliance culture, essential for Pakistan’s fiscal stability and sustainable economic growth. By embedding such a culture, the FBR aims to provide a more predictable environment for economic planning and development.
With the ATL now publicly accessible, the FBR seeks to maintain transparency and encourage greater participation in the tax framework. This transparency is intended to build trust among citizens and promote a fair taxation system where compliance yields tangible benefits.
As the deadline for SIM blocking approaches, the FBR continues to push for higher compliance rates, which are pivotal for the country’s broader economic stability and advancement. The hope is that with continued efforts and strategic initiatives, the tax compliance rate will see significant improvements, contributing to Pakistan’s economic prosperity.
