ISLAMABAD: The deadline for Pakistanis to file their income tax returns ends today, Monday, following the expiry of a two-week extension given by the country's tax regulator.
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.
Pakistan’s Federal Board of Revenue (FBR) announced last month it had extended the Sept. 30 deadline for filing income tax returns to Oct. 14.
“The FBR made the decision in view of requests from various trade bodies, Tax Bar Associations and general public,” it said in a notification.
The International Monetary Fund (IMF) last month 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.
The South Asian country 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.
In Sept., Finance Minister Muhammad Aurangzeb announced the country’s tax filers this year had 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 had already swelled to 723,000.
