Karachi, December 25, 2023 – The Federal Board of Revenue (FBR) on Monday announced Pakistan achieved a record high of 5.37 million active taxpayers for the 2022 tax year.
This marks a significant milestone in the government’s ongoing efforts to broaden the tax base and improve revenue collection.
The updated weekly Active Taxpayers List (ATL) released on Monday paints a promising picture of increasing fiscal responsibility among citizens and businesses. This figure includes individuals and corporate entities who filed their income and asset returns by December 24, 2023, demonstrating timely compliance or payment of late filing surcharges to secure their place on the list.
The rise in active taxpayers reflects the government’s unwavering commitment to expanding the tax net, a crucial step towards enhancing revenue collection and boosting the tax-to-GDP ratio. Officials at the FBR anticipate a further surge in numbers as their intensive campaign to bring individuals with taxable income under the tax umbrella gathers momentum.
Inclusion in the ATL offers tangible benefits, including lower tax rates on various financial transactions. However, a substantial portion of individuals with taxable income continue to operate outside the formal tax system, often due to factors like undocumented wealth.
Acknowledging the challenges, the FBR recently acknowledged the limited scope of the current active taxpayer base in comparison to the country’s 240 million population. They stated, “Pakistan confronts a formidable challenge in its fiscal landscape characterized by rampant tax evasion, an alarmingly low tax-to-GDP ratio, and an inadequately low number of tax filers. The country’s revenue generation suffers significantly, resulting in insufficient funding for critical public services and vital socio-economic development initiatives.”
Recognizing the pressing need to diversify its tax base, the FBR has outlined a comprehensive strategy to identify and integrate individuals with taxable income into the system. Their nationwide drive aims to “get registered with the Tax system and file their return of income,” encompassing all eligible individuals and income earners.
This encouraging surge in active taxpayers is a testament to the effectiveness of the FBR’s initiatives and offers a glimpse into a brighter future for Pakistan’s fiscal health. However, sustained efforts remain crucial to tackle tax evasion, encourage compliance, and unlock the country’s true economic potential. By embracing transparency and accountability, Pakistan can pave the way for a more robust and inclusive economy, capable of catering to the needs of its growing population and securing a prosperous future for its citizens.
