The Federal Board of Revenue (FBR) is grappling with a major issue as nil-filers surged to 68% of total income tax returns in 2023, with 2.3 million out of 3.4 million taxpayers potentially hiding their taxable income.
This leaves only 1.1 million taxpayers who declared income in their returns, posing a significant challenge for the government in addressing tax evasion.
The rise in nil returns, often submitted for one-time financial transactions or to benefit from lower tax rates under the Active Taxpayers List (ATL), highlights gaps in tax enforcement.
Sources within the Federal Board of Revenue (FBR) revealed that e-notices will be sent to around 1.6 million nil-filers, asking them to submit accurate returns for the tax year 2024. These individuals have been flagged for financial transactions indicating taxable income, which they failed to report.
Additionally, the FBR is considering strict measures to curb tax evasion, such as banning non-filers from engaging in financial and investment activities, and implementing travel restrictions except for Haj and Ziarat trips.
In other forms of tax non-declaration, approximately 300,000 taxpayers have filed null returns under a fixed tax scheme, declaring no business transactions, while another 50,000 claimed below-threshold income (BTL) for 2023. Combined, the total number of nil-null filers has reached 2.7 million for the year.
Sources indicate that mandatory digital invoicing will also be introduced as part of efforts to tackle the issue of null-filing.
