According to the FBR’s annual tax directory for 2018, Sindh province paid the most taxes to FBR. Its share in tax collection is 45% according to official documents. Punjab has contributed 35% in the tax revenues of Pakistan in 2018. The Islamabad Capital Territory contributed 14.8 %, Khyber Pakhtunkhwa 3.6 % and Balochistan 1.8 %. Gilgit Baltistan had a nominal share of 0.12 %.
In 2018, Karachi maintained its status as the largest tax paying city in the country. Karachi paid more tax than the combine tax of next four largest tax paying cities. Karachi almost contributed 50% in tax collection of FBR in 2018. The official figures contradict the claims of some political parties that Karachi alone contributed 70% in tax collection.
The political parties inflate the figures. There is no doubt that Karachi’s contribution is largest and crucial in achieving the tax collection targets of FBR. As a largest city of the country and main port, Karachi contributes more than the other larger cities of Pakistan.
According to tax analysis carried out by the Federal Board of Revenue (FBR) for the tax year 2018 on the basis of a city-wise breakup, the collection from Karachi amounted to Rs.572.59 billion for the tax year 2018, followed by Rs204.14 billion from Islamabad, Rs200.71 billion from Lahore, Rs35.17 billion from Rawalpindi, and Rs16.26 billion from Faisalabad.
Karachi, the financial hub of the country, contributed Rs395 billion in income taxes, 26 percent of the total direct taxes collected during the year. FBR’s total collection during the tax year 2018 amounted to Rs3.8 trillion.
Punjab leads the number of tax filers with 1.69 million income tax returns out of 2.85 million tax returns were filed during the year which is nearly 59% of total tax returns filed. Taxpayers in Sindh filed 779,771, or 27.34 percent of tax returns. Taxpayers in Khyber Pakhtunkhwa, Islamabad Capital Territory and Balochistan filed 171,303, 151,204 and 52,101 returns, respectively.
The FBR has been issuing tax directory since tax year 2013. The directory contains name and tax payment by taxpayers. These taxpayers include members of national and provincial assemblies and senate. Besides, it also has information about individuals and corporate entities, who contribute to the revenue during a year.
The breakup of tax filers revealed that around 44,610 income tax returns were filed by corporate entities for the tax year 2018. The number of registered companies with the Securities and Exchange Commission of Pakistan (SECP) was 87,622 in 2018. Every entity registered with the SECP is required to file an annual income tax return irrespective of profit or loss.
The major chunk in returns filing was from non-salaried and salaried individuals, who filed 1.52 million and 1.2 million returns, respectively. Meanwhile, the number of return filers by association of persons was 64,336.
The FBR said highest number of returns –1 million – filed by individuals whose income was Rs400, 000 and below, which was around 37 percent of the total return filed during the year. The drive to encourage returns filing was launched in the previous government to prevent tax evasion and avoidance. With ease in process of tax filing over the period, taxpayers are increasingly encouraged to record their annual income, expenditures and paid taxes.
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