ISLAMABAD: The country’s top tax machinery is confronted with a big dilemma of nil-filers, which has reached an alarming level of nearly 39 per cent of total income tax returns in the tax year 2025, Dawn has learned from official sources.

This presents a big challenge for the government in identifying individuals not paying their taxes, with 2.262 million out of 5.912 million filed up to Oct 31, potentially concealing their taxable income. This means that only 3.650m taxpayers declared incomes in their returns for tax year 2025 (TY25).

The pattern of nil-filers are across the three main categories — individuals, associations of persons (AoPs) and the corporate sector. The nil returns are submitted for one-time financial transactions or to take advantage of lower tax rates for placement on the Active Taxpayers List (ATL).

Concerns are mounting within the FBR that Pakistan’s income tax system is failing........

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