22,000 big taxpayers, 100,000 rich individuals slip under FBR radar

22,000 big taxpayers, 100,000 rich individuals slip under FBR radar:

ISLAMABAD: The Federal Board of Revenue (FBR) has identified over 21,800 big taxpayers and 100,000 rich individuals who have disappeared from the tax net in the past one year.  

In the tax years 2014 and 2015, the big taxpayers – including 7,720 companies and 14,103 associations of persons (AoPs) – had filed their income tax returns and paid revenue of Rs10.415 billion, and Rs11.697bn, respectively.

In tax year 2016, they did not file tax returns.

Some analysts believe the missing companies hint at a ‘tax revolt’ from big taxpayers in the wake of Panama Papers which were leaked in April 2016. The last date for the filing and payment of due taxes was Dec 31 2016 which was extended further. 

A tax official told Dawn that chief commissioners of all regional tax offices (RTOs) as well as large taxpayers units (LTUs) were directed to issue notices to these companies and AoPs for early submission of returns with the tax department.

According to a tax official, the revenue to be raised from these taxpayers was calculated at Rs12bn. “We have asked the field formation to strictly enforce the filing of returns and recovery of revenue from these big taxpayers,” the official added.

The FBR proudly claims it has net 1.2 million people who filed tax returns for 2016-17. However, there are only a million taxpayers which is barely 0.8pc of the population which the tax machinery can trace to their homes or workplace.

In India, the ratio of return filing to the population is 4.5pc, 58pc in France and 80pc in Canada.

This discrepancy has emerged from the comparison of the data compiled and maintained by Pakistan Revenue Automation (PRAL), a subsidiary of the FBR.

The 100,000 ‘missing’ individuals were previously return filers but slipped away from the system. “We have asked the field formation to enforce return filing from these rich individuals,” the official said.

The tax department is working on various initiatives like establishment of central data bank, etc to identify the tax evaders and non-filers, he added.

The number of corporate taxpayers missing from the tax base in 2016 was 7,720.

Of these, 4,588 or 60pc of the total missing companies are in Karachi and Lahore.

The breakup of the missing companies in domain of Corporate RTO Karachi is 2178, 61 in RTO II Karachi 61, 32 in RTO III Karachi, 152 in LTU Karachi, 36 in LTU II Karachi, followed by 1,910 in Corporate RTO Lahore, 172 in RTO II Lahore and 47 in LTU Lahore.

Around 56 companies evaded taxes in the jurisdiction of LTU Islamabad, 1,260 in RTO Islamabad, followed by 487 in RTO Peshawar, 363 in RTO Rawalpindi, 242 in RTO Multan, 181 in RTO Faisalabad, 109 in RTO Quetta, 98 in RTO Sialkot, 84 in RTO Bahawalpur, 79 in RTO Hyderabad, 65 in RTO Gujranwala, 45 in RTO Abbottabad, 24 in RTO Sukkur and 23 in RTO Sargodha.

Lahore has emerged as the leading city where more than 4,130 AoPs or 30pc of the total missing taxpayers are. The break up shows that in the premises of RTO II Lahore it stood at 4,116, Corporate RTO Lahore at 26 and LTU Lahore at 2, respectively.

In Karachi, the missing AoPs in the jurisdiction of Corporate RTO Karachi are 314, 1,055 in RTO II Karachi, 640 in RTO III Karachi, 9 in LTU Karachi and 4 in LTU II Karachi.

In the jurisdiction of LTU Islamabad, 2 AoPs evaded taxes. Tax evading AoPs in RTO Islamabad were 646, 1,226 in RTO Multan, 1,217 in RTO Faisalabad, 1,074 in RTO Sialkot, 806 in RTO Bahawalpur, 738 in RTO Peshawar, 670 in RTO Rawalpindi, 526 in RTO Gujranwala, 328 in RTO Sargodha, 306 in RTO Hyderabad, 226 in RTO Sukkur, 103 in RTO Abbottabad and 86 in RTO Quetta.