One-Third of Pakistan’s Tax Filers Declare Zero Income

News Desk 

Islamabad:  Nearly one-third of Pakistan’s tax filers — around 1.7 million individuals — have declared zero taxable income in their annual returns, according to a report by The News citing official sources.

Out of 5.5 million returns filed so far, the large number of “nil” declarations has raised concern within the Federal Board of Revenue (FBR), which sees it as a serious challenge to broadening the country’s tax base.

Officials said the FBR has also identified nearly 977,000 taxpayers who declared lower income for the current fiscal year compared to the previous one. The authority plans to launch extensive audits to detect potential underreporting and tax evasion.

“We have found 977,000 filed returns where the declared income was shown as less than in the last fiscal year,” a senior FBR official told The News.

Certain exporters have also reported losses in their filings. The FBR intends to issue tax notices after October 31, directing such filers to revise their returns or face legal action.

Despite the large number of “nil” returns, officials say the data collected remains valuable.

“We have obtained crucial information even through such returns, which will now be used to expand the narrow tax base and turn this information into tax revenue,” sources said.

The FBR has sent multiple reminder messages to filers ahead of the October 31 deadline, urging them to file or update their returns accurately. After the deadline, the authority will send follow-up notices to those who reported lower incomes than last year.

The board has also hired 2,000 auditors to strengthen enforcement and ensure a more effective audit process during the current fiscal year.

When contacted, FBR Chairman Rashid Mahmood Langrial said the authority had already messaged around 853,000 return filers, reminding them that the FBR possessed transaction data and would cross-check it against declared income.

“The FBR possesses a lot of data and information and will proceed against those who choose to hide their income,” the chairman said, adding that filers would receive two warnings before ex parte assessments are conducted.

Officials added that some taxpayers declaring “no income” have been found to make significant financial transactions, and such cases will be pursued under tax laws.

The deadline for filing income tax returns was extended to October 31, as the FBR expects up to three million additional submissions by the end of the month.