| Karachi: A noteworthy trend has emerged as citizens in Pakistan rush to become tax filers and secure their spot on the Active Taxpayers List (ATL) in a bid to counter the unprecedented increase in electricity bills, according to news published on August 28.
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The Federal Board of Revenue (FBR), Pakistan’s apex tax authority, recently unveiled the updated ATL for the tax year 2022, reporting an unprecedented inclusion of approximately 4.5 million individuals and businesses. This significant rise is being attributed to citizens proactively filing annual declarations to mitigate the impact of higher income tax rates.
The strategy behind the increased withholding income tax rates for those not on the ATL has led individuals to actively seek recognition by tax authorities. The recent electricity bills, carrying substantial tax components, especially for non-ATL individuals, have provided added impetus for this movement.
Released on Monday, the weekly update to the Active Taxpayers List (ATL) by the FBR covered the names of entities that filed tax returns for the tax year 2022 up to August 27, 2023. The surge in active taxpayers is a result of well-executed initiatives that have nudged non-compliant entities into the formal tax documentation framework. Government-led efforts to foster tax compliance while discouraging non-filers have been instrumental in achieving this milestone.
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The latest ATL update, encompassing returns submitted until August 27, 2023, revealed that the FBR received a remarkable 70,000 returns in the preceding week. The introduction of a significant measure via the Finance Act of 2023 played a pivotal role in boosting tax return submissions.
The consistent drive by the FBR to foster tax compliance through mechanisms like the ATL and digital tax systems has yielded favourable outcomes. These initiatives have not only enhanced the tax collection process but also heightened transparency within the tax structure.
Given the FBR’s unwavering commitment to regular ATL updates, experts anticipate a continued increase in active taxpayers over the upcoming months. The government’s dedication to promoting tax compliance, coupled with effective enforcement measures, is poised to reinforce Pakistan’s holistic tax collection endeavours, thereby contributing to sustainable economic progress and growth for the nation. |
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