Only 2.6M returns amid putting taxpayers’ money on ads

Only 2.6M returns amid putting taxpayers’ money on ads

The Federal Board of Revenue (FBR) in Pakistan has faced a shortfall in tax return submissions for the tax year 2021, despite significant spending on advertising and media campaigns aimed at encouraging taxpayers.

The FBR had set a target of 3.5 million tax returns but received only 2.6 million by the specified deadline.

It is noteworthy that the FBR had invested substantial resources in media campaigns to prompt taxpayers to file their annual returns. However, the outcome has fallen short of expectations, raising questions about the effectiveness of the strategies employed to boost compliance.

The discrepancy is particularly interesting given the FBR’s celebration of record-breaking numbers on the last filing date, October 15, 2021. The FBR declared that it had received the highest number of returns in its history on that date, reaching a staggering 2.6 million returns and collecting Rs48.6 billion in tax with returns. This marked a 45% growth in tax return filings and a 64% growth in tax paid with returns compared to the previous year’s figures on December 8, 2020.

However, a deeper examination reveals that the growth rate in returns filed and tax paid on October 15, 2021, was significantly lower than the growth recorded on the same date in 2020. On October 15, 2020, the FBR had received 0.5 million returns and Rs. 9.8 billion in tax with returns, indicating almost five times higher growth in both returns filed and tax paid with returns compared to the current year.

Despite the shortfall against the target for the tax year 2021, the FBR highlights a positive overall trend in tax return submissions. By June 30, 2021, the FBR had already received 3.0 million total returns and collected Rs54.7 billion in tax with returns for the entire tax year 2020.

The FBR attributes this growth to a robust strategy and a comprehensive media campaign that involved both print and electronic media. The campaign was further amplified by engaging national heroes, celebrities, and public figures who shared video messages on social media. Additionally, the FBR collaborated with cellular companies to send customized bilingual SMS messages to their combined 128.6 million subscribers across the country. The involvement of eminent columnists and writers in leading national newspapers was another initiative to promote a culture of tax compliance.

While the FBR recognizes the positive strides made in tax return submissions, the apparent discrepancy between the celebratory statements and the unmet target raises questions about the efficacy of the strategies employed and underscores the challenges in fostering widespread tax compliance. As the FBR analyzes the outcomes, it may need to reassess its approach to ensure that future campaigns effectively encourage taxpayers to meet filing deadlines and contribute to the country’s revenue goals.