July 28, 2023
Pakistan is one of the most populous countries in the world, ranking at number 5. It has a significant population of 23 million, but it’s evident not all of these are taxpayers. Either way, considering the ratio of taxpayers, it’s still a very large number of people whose taxes need to be monitored and tallied.
This needs many workers who can administer and oversee these tasks. For this exact purpose, the Federal Board of Revenue hires tax filers. Agencies other than the FBR, such as provincial tax collecting agencies, also hire tax filers. FBR (Federal Board of Revenue) is Pakistan’s federal and largest tax-collecting organization. It reports directly to the leaders in power or the government.
The Federal Board of Revenue has thousands of employees working in the tax system and honestly fulfilling their duties. Each employee has a different responsibility, and tax filers are one of these.
When it comes to collecting taxes, it can be pretty sketchy and confusing for one to handle. This happens especially if there are a lot of taxpayers around. In this fury and rush, some taxpayers go unchecked and attempt to commit fraud in paying taxes.
FBR, a federal agency, ensures that none happens by hiring professional and experienced tax filers. It is a very responsible job and comes with many lifelong advantages. Tax filers are not only responsible for handling and filing taxes. They are also responsible for various other duties.
Tax filing is a very rewarding job, yet many people do not prefer doing it. To prevent this, the Government of Pakistan has introduced several benefits only tax filers can enjoy. Any person can become a tax filer by submitting their income tax declaration to the Federal Board of Revenue (FBR).
The government of Pakistan has introduced more than 150 instances or activities. These instances allow a person having tax filer status can save large amounts of money. The government is trying to introduce more and more instances to get more people to become tax filers. As compared to non-filers, tax filers enjoy twice as much as non-filers and save more money.
Given so many advantages, it’s almost impossible for us to write about every single one of them, so we have enlisted the 12 most significant advantages that tax filers enjoy, but before that, you’ll want to know who they are. But worry not; we’ll make it all easier for you. Let’s get straight to the point.
Who are tax filers, and what are their duties?
A tax filer calculates taxes and prepares tax payment bills for individuals and businesses. A tax filer also goes by the name of a tax preparer.
They obtain information about their clients’ finances and estimate tax payments and returns. They fill in tax reports for their clients and advise them on tax payment strategies.
Their duties include calculating tax credits, liabilities, and deductibles. Moreover, they also review tax reports to see if they comply with the government’s rules and regulations. They also all the queries of their clients related to finances and taxes.
12 Benefits For Tax Filers in Pakistan
Tax filers get not only handsome monthly salaries but also several other perks. We have made a list to help you get a better understanding of it:
- When tax filers purchase immovable property, such as houses, flats, shops, apartments, or mansions, they are only responsible for paying a 1% tax to the government. On the other hand, inactive taxpayers or non-tax filers are liable to pay a 2% tax on every immovable property they buy.
- A large percentage of Pakistani citizens actively buy prize bonds to make a profit. If a tax filer wins a prize bond, they must pay a 15% tax on each win. On the contrary, non-tax filers are liable to pay the government a 30% tax per win.
- In Pakistan, especially male citizens are very enthusiastic about buying automobiles. But, the huge amount of taxes that come with it make some citizens hold themselves back. When any automobile or vehicle of a tax filer is registered, they are granted a 50% concession on this tax payment. In contrast, the non-tax filers pay the full amount of tax to the FBR.
- Income tax makes the most of the total taxes paid to the government. Many Pakistani citizens hold jobs or own businesses, while a fraction remain unemployed. If the tax filer has some partner who does the job, they must pay a 15% tax on the total dividend income. At the same time, the non-tax filers pay a 30% tax to the government.
- Auctioning is a great way to sell items of antiquity or great value. Several buyers offer whopping amounts of money for that item. This helps the seller to sell the item to the one offering the most money in exchange for the item. If you’re a tax filer, you are liable to pay only 10% tax on the money you got from the auction of your product. At the same time, the non-tax filer pays 20% tax off the auction payment.
- There’s a huge commercial supply of goods in Pakistan daily. These movable properties or goods, such as furniture, electronics, pottery, and other household supplies, have a huge demand. When a tax filer sells commercial goods, he must pay only 4.5% of that payment as tax to the government. On the contrary, non-tax filers pay a 9% tax on the commercial supply of goods.
- Today, almost every person has a bank account for the ease of saving, profiting, and transferring large amounts of money. People who have a savings bank account and appear on the Active Taxpayers List (ATL) or are tax filers are liable to pay 15% tax on the profit or yield they receive from a bank. At the same time, non-tax filers pay a 30% tax on each profit or yield.
- Pakistan is home to many raw materials, including minerals such as emeralds, limestone, etc., yet some raw materials are unavailable in Pakistan. Pakistani merchants import these raw materials from different foreign nations. Tax filers who import these raw materials must pay only 5.5% tax. In comparison, non-tax filers have to pay an 11% tax on each import of raw materials.
Taxes on Imports
- There are a lot of Pakistani citizens who belong to the privileged class. Therefore, they have the money along with enthusiasm for buying imported goods. Pakistani merchants are involved in the commercial import of moveable goods and properties such as furniture, machinery, etc. Tax filers involved in it are liable to pay only 6% tax at the customs clearance stage. On the other hand, non-tax filers are liable by the FBR to pay a 12% tax on commercial import of goods.
- In the modern world, people, especially employees, are bound by contracts to prevent them from abruptly leaving their jobs. As directed by the Federal Board of Revenue, 7.5% of tax is to be withheld on the stage of execution of contracts by a tax filer. On the other hand, a 15% tax is to be withheld when a non-tax filer executes a contract.
Taxes on Services
- The government does not impose taxes and property and goods only. It also applies several taxes on the services that one sells. For example, not everybody is a merchant or a trader. Some people offer services such as repairing, painting, nursing, etc., in exchange for money. FBR has also applied tax on it. Tax filers must pay only 10% tax, while inactive taxpayers or non-tax filers must pay 20% tax.
- Some tax filers take a commission for bringing in new tax filers or for any other service by marketing their ideas. According to FBR, 12% tax is chargeable on the commission of tax filers, while on the contrary, 24% tax is chargeable for non-tax filers or inactive tax filers.
As of now, we have mentioned numerous benefits that tax filers enjoy. We hope you know how fruitful it is to become a tax filer. Considering all the given data, we can easily deduce a statement. Non-tax filers pay double the taxes as people who register themselves as tax filers.
The government exempts no one from the types of taxes mentioned above. They are deducted at a stage where the amount is not even in your possession. For example, the profit or yield in your bank’s savings account is added after the FBR has deducted the tax according to your tax filer status.
If you are a tax filer, then the amount of tax that is liable is half the percentage of tax liable on a non-tax filer. So what are you waiting for? Register now and enjoy the benefits of being a tax filer.
A highly skilled tax consultant specializing in Pakistan’s intricate tax laws and regulations. With over a decade of experience in the field, he has helped countless individuals and businesses navigate the complexities of taxation. His expertise lies in optimizing tax strategies, ensuring compliance, and maximizing returns for his clients. John’s in-depth knowledge of Pakistan’s tax system and dedication to staying up-to-date with ever-changing laws make him a reliable and sought-after advisor. Whether it’s tax planning, filing, or resolving tax-related issues, clients trust John’s proficiency and commitment to achieving financial success while remaining fully compliant with the law.