THE FBR’s initiative to roll out the long-promised simplified electronic income tax return form for individual taxpayers must be commended. The final interactive form is said to have been released after consultation — and the incorporation of public feedback — on its prototype. This implies that the final form is an improved version of the earlier one rolled out last month. The simplified form is expected to facilitate salaried individuals, professionals and small business owners who fall below a prescribed threshold. Taxpayers who exceed that threshold will have to follow the standard filing process. The form incorporates an auto-fill system that integrates data on purchases, assets and tax deductions at source, ultimately generating a single return upon completion. This will facilitate taxpayers, streamline tax payment processes and make the exercise more transparent for both taxpayers and collectors. The simplified filing should address grievances against a tedious, complex process — one reason why many have been deterred from filing their returns. If the new form can remove the barriers for taxpayers, especially the salaried classes and small business owners, it could help improve tax compliance.

That said, simplification and ease of tax payments can do only so much; procedural changes will not remove the shortcomings of the overall tax regime that are at the root of our abysmally low tax-to-GDP ratio of 10pc — one of the lowest not only in the region but also the world. When powerful and cash-rich segments of the economy, such as retail, real estate, agriculture and high net-worth professionals, remain effectively outside the tax net, the burden of financing the state falls disproportionately on compliant taxpayers. This imbalance creates strong incentives for those already paying to find ways to opt out of the system, including through underreporting or short-filing their tax obligations. Ease of tax filing is crucial; but equally important is a fairer and equitable taxation structure.

Published in Dawn, August 21st, 2025