FBR fail to enhance Tax net filers in FY 2016-17

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KARACHI: The Federal Board of Revenue (FBR) received more than 80,000 income tax returns during March, which brought the total number of return filers in the active taxpayers list (ATL) for the tax year 2016 to 1.09 million, sources said on Tuesday.  The sources said the FBR issued the ATL on March 1, 2016 on the basis of returns filed during the tax year 2016. The number of active taxpayers was 1.01 million at the time of the ATL issuance.

An FBR official said the ATL is expanding due to enforcement and audit drive launched by the revenue body. 

The official said the tax department has issued notices to the taxpayers who failed to file their returns for the tax year under review. Besides, the notices have also been issued to the potential taxpayers, who were identified through broadening of tax base drive, the official added.

The official said the FBR aims to increase the number of return filers to 1.5 million by June and 1.8 million before issuing the new ATL in March 2018.  The appearance of name in the ATL is mandatory for availing the reduced withholding tax rate imposed on various transactions.

Three years back, the government created a gap in the tax rates for filers and non-filers to increase the cost of transactions done by non-compliant individuals.

The government imposed 0.6 percent withholding tax on banking transactions other than through cash from July 1, 2015, payable by income tax returns non-filers. 

The rate was reduced to 0.3 percent from July 11, 2015, but it was increased to 0.4 percent from March 2016. The rate was applicable up to 31 March.   The number of return filers in the tax year 2015 was 1.2 million as per the updated ATL issued by the end of February this year.

The FBR sources said the returns grew 22 percent year- on-year in April.