Karachi, January 15, 2024 – In a landmark achievement, Pakistan has hit a historic high with 5.5 million taxpayers listed on the Active Taxpayers List (ATL), as disclosed by the Federal Board of Revenue (FBR) in its release on Monday.
This significant milestone underscores the government’s relentless commitment to expanding the tax base and improving revenue collection in the country.
The latest update from the FBR is a testament to the success of ongoing efforts aimed at fostering fiscal responsibility among both individual citizens and businesses. The weekly release of the ATL showcased a remarkable surge in the number of entities, both individual and corporate, that filed their income and asset returns by January 14, 2024, for the tax year 2022. This reflects a praiseworthy demonstration of timely compliance, with some taxpayers opting to pay late filing surcharges to secure their position on the coveted ATL.
The increase in active taxpayers is a crucial indicator of the government’s commitment to broadening the tax net—a pivotal step in augmenting revenue collection and elevating the tax-to-GDP ratio. Officials at the FBR are optimistic about witnessing a sustained increase in these numbers as their aggressive campaign gains momentum, bringing more individuals with taxable income into the formal tax fold.
Inclusion in the ATL is not merely a symbol of compliance; it comes with tangible benefits, including lower tax rates on various financial transactions. Despite these advantages, a noteworthy portion of individuals with taxable income continues to operate outside the formal tax system, often due to factors such as possessing undocumented wealth.
Acknowledging the existing challenges, the FBR openly recognized the limited scope of the current active taxpayer base in comparison to the country’s vast population of 240 million. In a statement, they emphasized, “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.”
To address these challenges head-on, the FBR has outlined a comprehensive strategy to identify and integrate individuals with taxable income into the system. Their nationwide drive encourages all eligible individuals and income earners to “get registered with the Tax system and file their return of income.”
The surge in active taxpayers not only underscores the effectiveness of the FBR’s initiatives but also paints a promising picture for Pakistan’s fiscal health. However, sustained efforts are deemed 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.
