6 Important benefits of Tax Filing in Pakistan

December 6, 2022by admin

The Government of Pakistan has offered more than 150 opportunities/activities to encourage and motivate every citizen of Pakistan to become a filer by filing their income tax return to the FBR. More and more instances are being created every day to offer maximum tax benefits to those with taxpayer status. Filing your income tax returns with FBR can save you a lot of money compared to non-filers.


Who is a Filer?

In Pakistan, a filer is a person who regularly declares annual income tax and sales tax. He/she is included in the list of “Active Taxpayers (ATL)” drawn up by the Federal Office of Finance (FBR). 

If you wish to become a taxpayer, file your annual tax return on the FBR’s IRIS online portal. As an applicant, your name will appear on the Active Taxpayer List (ATL) that FBR shares with the public.

Once you are listed, you will be eligible to enjoy the benefits of filing income tax returns in Pakistan.

Now, have a look at the enormous benefits for tax filers in Pakistan.


Half Withholding Tax

As a filer, you only have to pay half the withholding tax. Meanwhile, people who don’t file taxes will have to pay the full amount. 


Property Ownership

If you are a filer you can buy any property in Pakistan. But people fleeing income tax cannot buy a property worth more than 5 Million in Pakistani rupees.


Relief in Imports and Exports

If you are a filer, you only have to pay a 5.5% duty on imported raw materials. However, non-declarants have to pay 8% of the total import of the same raw material. For commercial exports, filers only have to pay a 6% duty on each transaction. On the other hand, non-filers have to pay a 9% fee for the same transaction.


Cut on Dividends and Banking Schemes

Filers benefit from a 5% cut in dividends compared to non-filers. When a company distributes dividends (profits) to employees, the filer has to pay a 15% tax. Meanwhile, the non-filer has to pay 20% tax. 

There are various schemes by banks that offer a return or savings. The filers in turn enjoy a 5% reduction in these schemes compared to non-filers Filers pay 10% tax while non-filers pay 15% tax. 

Savings on Price

When a taxpayer wins prize money through an award bond, they save 10% in taxes. You only have to pay 15% tax while the non-filer pays 25% tax on the prize money.


Reduction in Auction and Property Transfer Tax

When taxpayers transfer their property, they only have to pay a 1% tax. But non-filers have to pay a 2% tax for the same work. 

When various auctions are conducted, whether private or government, taxpayers save 5% on their taxes. As a filer, you only have to pay 10% tax, while non-filers pay 15% tax.


Want consultation or any accounting help? FAPL is ever-ready to serve!

FAPL is a team of accounting and bookkeeping professionals, ever-ready to help you with their expertise. For assistance, please visit https://fapl.com.pk/