The government has decided to abolish non-filers from the tax laws and gradually ban their 15 types of activities, as it has won rare support from Pakistan's top industrialists for getting more revenues from existing filers and punishing non-compliant citizens—Government to go all-out against non-filers, The Express Tribune, September 25, 2024

The government is set to introduce a raft of measures to address the concerns of individuals not required to file tax returns, such as housewives, people with an annual income below Rs600,000, and overseas Pakistanis…Under the proposed system, a new definition of family will be introduced into income tax law. A wife, a son under the age of 25, and an unmarried daughter will be allowed to benefit from the filing status of a husband or father—A new category for families to reduce the tax filing burden, The Dawn, September 26, 2024

The newspapers, as well as electronic and social media, for the last few days, have been debating the (purported) decision of the incumbent government to finally end the undesirable category of “non-filers” from the Income Tax, Ordinance, 2001. It needs to be recalled that it was introduced through the Finance Act, 2014, prepared under the command of the self-acclaimed economic wizard (sic) of Pakistan Muslim League (Nawaz), Muhammad Ishaq Dar, presently 4th Deputy Prime Minister and 39th Foreign Minister of Islamic Republic of Pakistan. He is also the Leader of the House in the Senate of Pakistan.

The “non-filer” innovation (sic) under Daronomics (a renowned author, former State Bank of Pakistan governor, economist, and an advisor to the Prime Minister in the government of Pakistan Tehreek-i-Insaf, Dr Ishrat Hussain, coined this term to describe the complicated connection between economic and political affairs in Pakistan) was aimed at broadening the tax base. However, in the last 10 years it has proved to be a revenue-yielding measure for the infamous apex revenue authority of Pakistan, the Federal Board of Revenue (FBR), known for its highhandedness and collecting over 90% of taxes through withholdings.

The FBR cannot repudiate the fact that with effect from July 1, 2024, the entire taxable population and even those having no income or income below the taxable limit are paying advance and adjustable 15% income tax as filers and 75% as non-filers, being prepaid or postpaid mobile/broadband users

It is an incontrovertible fact that not less than 100 million Pakistanis as mobile users and by nearly 70 types of withholding taxes imposed under the Income Tax Ordinance, 2001, both adjustable and non-adjustable, paid advance income tax during the fiscal year 2022-23, but only a fraction of them (about 1.5% filed income tax returns showing some taxable income). The term “taxpayer” as defined in section 2(66), not filing income tax returns, categorised as “non-filer”, and not appearing on FBR’s Active........

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