ISLAMABAD: Only 338 companies and 217,350 people have so far filed their tax returns despite an extension of two months.

The original deadline was set for Aug 31, which was extended to Sept 30 and then to Oct 31.

Moreover, of the 3.3 million taxpayers registered with the Federal Board of Revenue (FBR), only one per cent have chosen to e-file their returns so far.

The FBR is responsible to ensure that all those who have national tax numbers file their tax returns along with their wealth statements.

Last year, 1.1m taxpayers filed their returns. However, this number was achieved after the deadline was extended several times to April 2016.

As per income tax law, filing of returns is mandatory for all those who possess a 1,000cc car, a plot of 250 square yards or a flat of 2,000 square feet in any municipal corporation in the country.

The number of such people is in millions, but low filing shows poor enforcement by the tax department and non-compliance by people.

On top of all, the business community also showed a lukewarm response in filing their tax returns. Of the 62,000 companies registered with the Securities and Exchange Commission of Pakistan, 338 (0.5pc) have filed their tax returns so far. In contrast, 731 companies filed their tax returns during the comparable period a year earlier. For companies, the deadline for filing tax is Dec 31.

However, the number of taxpaying individuals has increased marginally to 217,350 from 216,472 a year ago. Besides, 8,730 returns were filed by association of persons this year as against 11,554 returns last year.

A tax official said people are facing problems in filing tax returns due to defects in the e-filing software.

Since 2013, the government has made it mandatory upon salaried and non-salaried individuals having an annual income of over Rs500,000 to e-file their tax returns.

The relaxation of employer statement of deduction of income directly from salary is no more accepted as a tax return.

The decision, however, was not followed by any facilitation measures like removing defects from the software.

The limit of Rs1m or more (declared income or assets for filing of wealth statement) has also been done away with now.

As a result, it is now mandatory for all resident individuals to file wealth statement and wealth reconciliation statement irrespective of the income threshold.

In the wealth statement, individuals would have to declare movable assets (cash, gold, cars, and domestic appliances) and immovable assets (plots, houses, etc).

Although there is no wealth tax, which was abolished in 2002, individuals still have to declare their assets for uncovering the concealed incomes.

For enforcement of these laws, the government has enhanced powers of commissioners of income tax since 2013-14 who can ask any person to file a return or income during the current or last five years without any specific time period.

The government also has also introduced a fine of Rs20,000 for those who do not file their income tax returns.

Earlier, commissioners would have to serve a notice of minimum 30 days.

Published in Dawn, October 28th, 2016