ISLAMABAD: The government’s efforts to bring the rich into the tax net has failed to bear fruit as only 845,985 people filed their income tax returns in the tax year 2016.

Of them, 769,565 people filed their returns electronically and 76,420 manually. The government did not extend the last date for filing income tax returns beyond Dec 31, 2016, which is one reason behind the drop.

Last year, the Federal Board of Revenue (FBR) received 1.1 million income tax returns after the deadline was extended several times, a tax official said. Official data available with Dawn shows that as of Dec 31, 2015, the FBR received 674,671 returns.

The minimum penalty for not filing returns, statements or wealth statements starts from Rs5,000 and can be as high as 25 per cent of the tax payable in a year. The non-filer would either declare his total income for assessing tax in a year or a tax official would declare it ex parte.

Tax compliance in Pakistan is in a constant decline. The tax compliance level fell to 21.32pc in the tax year 2016 from 26.17pc in tax year 2012, reflecting a poor tax culture in Pakistan. The tax-compliance in the tax year 2010 was 65pc.

The number of people having national tax number stood at 3.3m in 2012 as against 3.7m in the tax year 2016.

The breakdown of total returns received until Dec 31, 2016 shows that he FBR received 789,864 returns from individuals (salaried and non-salaried), 39,396 from the associations of persons and 16,725 from the corporate sector. The tax compliance level in the corporate sector is 25pc.

Moreover, the Securities and Exchange Commission of Pakistan registered around 65,000 companies in year under review.

Published in Dawn, January 7th, 2017