A large portion of our country’s workforce is made up of salaried employees and entrepreneurs. Despite having millions of working professionals and business owners, Pakistan’s tax-to-GDP ratio remains alarmingly low. But why are so many people still not paying taxes? The biggest reason for this tax gap is a lack of awareness.
Many self-employed and salaried individuals in Pakistan are simply unaware of the numerous benefits of being a tax filer. It’s important to understand that the funds collected from taxpayers are among the biggest sources of income for the national economy. Moreover, it is every Pakistani citizen’s duty to pay the taxes levied on their income and assets.
In recent years, serious efforts have been made by the Government of Pakistan and the Federal Board of Revenue (FBR) to expand the tax net. This includes penalising non-filers and providing incentives for those who regularly file their tax returns. After making tax return filing mandatory for both salaried individuals and business owners, FBR has also started sending notices, directing people to register for a National Tax Number (NTN) and get their names added to the Active Taxpayers List (ATL).
Benefits of Being a Tax Filer in Pakistan
If you haven’t started filing your tax returns yet, now is the perfect time — especially with the deadline fast approaching. Besides fulfilling a national duty, taxpayers in Pakistan enjoy considerable tax relief compared to non-filers.
Here’s a quick look at the advantages that tax filers enjoy:
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Withholding Tax: Taxpayers pay half the rate compared to non-filers.
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Property Purchase: Non-filers cannot buy property worth over PKR 5 million, while filers face no restrictions.
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Raw Material Imports: Non-filer importers pay 8% tax, whereas registered taxpayers pay only 5.5%.
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Commercial Exports: Non-filer exporters face a 9% duty, while filers pay 6%.
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Dividend Tax: Non-filers are taxed at 20%, but Active Taxpayer List (ATL) filers pay 15%.
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Bank Profits & Savings: Non-filers pay 15% tax, compared to 10% for filers.
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Prize Bonds: Prize money is taxed at 25% for non-filers and only 15% for filers.
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Property Transfers: Filers pay 1% tax, while non-filers pay 2%.
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Auctions (Govt./Private): Filers pay 10% tax, whereas non-filers pay 15%.
Becoming a tax filer in Pakistan not only fulfills your legal and civic responsibilities but also opens doors to significant financial benefits. From lower tax rates on income, property, and savings to unrestricted ownership rights, being listed on the Active Taxpayers List (ATL) is clearly worth it. As the deadline approaches, now is the ideal time to register, file your returns, and enjoy all the advantages that come with being a responsible taxpayer.
Photo by Markus Winkler on Unsplash
