Islamabad, June 19, 2023 – Recent data released on Monday highlights a significant increase in the number of active taxpayers in Pakistan, reaching 3.94 million.
This growth may be attributed to the re-imposition of withholding tax on cash withdrawal, as reported by the Federal Board of Revenue (FBR) in the latest Active Taxpayers List (ATL) updated up to June 18, 2023.
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The latest ATL for tax year 2022 was issued on March 01, 2023, when the total number of active taxpayers stood at 3.21 million. Since then, the FBR has received approximately 730,000 new income tax return filings.
Tax experts suggest that this substantial increase in return filings can be attributed to the new measures introduced by the government in the 2023-24 budget. One notable measure was the re-introduction of withholding tax on cash withdrawals for individuals not on the ATL.
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According to the Finance Bill 2023, starting from July 01, 2023, the FBR will collect a withholding tax of 0.6 percent on cash withdrawals exceeding Rs50,000 in a day.
The ATL was introduced by the FBR a few years ago to facilitate compliant taxpayers by providing them with reduced rates of withholding taxes. This initiative aims to encourage individuals to become part of the formal tax system and contribute to the country’s revenue collection efforts.
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The increase in the number of active taxpayers is a positive development for Pakistan’s tax base. It reflects the effectiveness of the government’s measures in encouraging tax compliance and expanding the formal economy.
As more individuals join the ATL, the government will be better equipped to ensure fair and equitable taxation, promote economic growth, and allocate resources efficiently. The FBR will continue its efforts to facilitate taxpayers and enforce tax regulations to strengthen the overall fiscal framework of the country.
