ISLAMABAD: Pakistan’s central tax revenue authority this week announced it had extended the last date for filing income tax returns to Oct. 14 after considering requests from trade bodies, tax bar associations and the general public.
The Federal Board of Revenue (FBR) had warned non-filers that it would not allow any extension in the Sept. 30 deadline to file income tax returns for the tax year 2023-24. However, in a notification on Monday night, it announced that income tax returns can now be filed by Oct. 14.
“The FBR made the decision in view of requests from various trade bodies, Tax Bar Associations and general public,” the board said in a notification, a copy of which was seen by Arab News.
Pakistan has one of the lowest tax ratios in the world, according to the World Bank. The South Asian country’s failure to generate tax revenues in higher amounts stems from the fact that it has a narrow tax base, low compliance rate, an inefficient tax administration and massive tax evasion, the international financial institution has said.
The International Monetary Fund (IMF) last week approved a $7 billion loan for Pakistan, critical for the South Asian country to meet its external financial obligations and strengthen its national currency. One of the key demands of the IMF from Pakistan has been to improve its tax administration and broaden its tax base.
Pakistan last year came to the brink of default as the economy shriveled amid political chaos, the devastating 2022 floods and decades of mismanagement. Last-minute loan rollovers from friendly countries as well as a $3 billion bailout from the IMF helped the nation avert the crisis.
Pakistan aims to collect an ambitious $46 billion through taxes this financial year. Authorities have identified 4.9 million taxable persons in the country by using modern technology. On Sunday, Finance Minister Muhammad Aurangzeb announced that the country’s tax filers this year have almost doubled from 1.6 million last year to 3.2 million. He also disclosed that last year Pakistan recorded at least 300,000 new tax filers while this year, the figure has swelled to 723,000.
Prime Minister Shehbaz Sharif’s government has used unusual methods in the past, including blocking 210,000 mobile connections, to compel people to file their tax returns. The finance minister warned that non-filers will be deprived of certain facilities to encourage them to become part of the tax net.
“Non-filers will not be able to buy vehicles, won’t be able to buy properties, won’t be able to [access] current bank accounts and mutual funds and will face a lot of problems with cash deposits and withdrawals,” he said.
