ISLAMABAD: Almost half of the companies registered with Securities and Exchange Commission of Pakistan (SECP) have been found as non-compliant in mandatory income tax return filing.
The Year Book 2018/2019 of Federal Board of Revenue (FBR) revealed that 43,246 corporate returns were filed for Tax Year 2018.
However, the official details shared by SECP showed that it registered 87,622 companies by June 30, 2018.
According to Section 114 of Income Tax Ordinance, 2001 it is mandatory for every company to file annual income tax return.
The statistics of FBR’s Year Book 2018/2019, however, revealed that corporate return filing was gradually increasing.
However, despite all efforts the corporate return filing was increased to 43,246 for Tax Year 2018, which was 38,417 in Tax Year 2017 and 35,504 in Tax Year 2016.
The overall income tax return filing has witnessed sharp increase in tax year 2018. The FBR data showed that the total return filing increased to 2.66 million in tax year 2018 as compared with 1.89 million in tax year 2017, showing 41 percent increase.
The significant growth was seen in return filing by individuals. The individuals including salary and business filed 2.56 million annual returns for tax year 2018 as compared with 1.79 million in tax year 2017, showing 42.4 percent increase.
The FBR said that in past the trend for filing of income tax returns has not been satisfactory in Pakistan.
Keeping in view very low compliance, FBR had initiated a Broadening of Tax Base (BTB) drive few years ago, which has not started paying dividends in shape of growth in the number of filers.
The income tax returns which were just 1.5 million in tax year 2016 have crossed the two million mark first time in the history of FBR.
During tax year 2017 the number of income tax filers reached to 1.9 million and in tax year 2018 increased to 2.2 million.
During TY 2018 the number of return filers increased by 17.1 percent or 316,526 in absolute terms.
This performance in terms of number of returns is satisfactory but payment with returns has a meager growth of 3.0 percent, which is the matter of concern.