ISLAMABAD: The Federal Board of Revenue (FBR) has decided to not extend the date for filing tax returns.
According to the FBR, failure to submit income tax returns will result in a daily fine of Rs1,000 and non-filers will be sentenced to two years in prison.
Individuals and associations with more than Rs300,000 in business income per annum are required to submit tax returns. Apart from that, salaried persons earning more than Rs600,000 per annum and owners of 500 square yards houses or flats are also required to file returns.
Vehicle owners of 1,000cc or larger and industrial consumers who pay more than Rs500,000 in electricity bills per annum are also required to file tax returns.
The last date for the submission of tax returns is September 30.
One of the FBR’s greatest challenges is widen the tax base. Last year it collected over Rs4 trillion in taxes and it has set a target of Rs5.8 trillion for the next year. The IMF has demanded that the target be Rs5.9 trillion, which experts have said is going to be challenging.
The country’s tax-to-GDP ratio or tax contribution to the economy as percentage of GDP goal is 17% by fiscal year 2024. There are currently 1.2 million active tax payers and this number has to be at least doubled to 3.5 million.
Since fiscal year 2012, Pakistan has improved its tax-to-GDP ratio from 9.5% to 12.9% (FY2018). It needs to be 15% which is the mark for developing countries if they want to be able to fund basic functions of the government functions and provide the people services.