‘Taxpayers’ Satisfaction Survey (2023)’ 53pc of businesspeople file tax returns without any help

ISLAMABAD: Around 53 percent of business community has filed their annual income tax returns without any help from external accountants/chartered accounts or tax lawyers.

This is the result of the Taxpayers’ Satisfaction Survey (2023) conducted by a research/consultancy firm for the Federal Board of Revenue (FBR).

However, business community has refused to share their response to the question of the Federal Board of Revenue (FBR) about experience of their interaction with the board.

When contacted, Syed Tanseer Bukhari, President, Rawalpindi Islamabad Tax Bar Association said the return form of the corporate sector is still very technical, complex and lengthy. The figure of 53 percent seems to be unrealistic as many return filers do not mention names of their tax consultants or lawyers engaged in return filing, he added.

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All Pakistan Anjuman-e-Tajiran (APAT) Chairman, Ajmal Baloch told Business Recorder that the business and trade is demanding a simple return form in Urdu language due to complex returns form. He raised question that how 53 percent of the business community is filing returns without any help?

The Taxpayers’ Satisfaction Survey was conducted for the FBR with two primary objectives: Firstly, conduct a taxpayer satisfaction survey on FBR services and products in the Inland Revenue services. Secondly, generate insights on how to further improve the quality of service and product provided by the Inland Revenue services to taxpayers. The focus of this survey was on businesses, and thus, the sample included sole proprietors; association of partnerships (AOP); private limited companies and public limited companies.

Of the 550 firms which were surveyed, 516 confirmed to be registered taxpayers. Hence, the valid responses considered for this exercise was based on these 516 businesses.

Surveyed businesses in Islamabad, Lahore and Karachi belonged to a variety of economic sectors. Of these, 141 (27%) businesses operated in the manufacturing sector, mostly comprised of private and public limited companies. This was followed by 123 (24%) businesses operating in wholesale and retail trade and 59 (11%) businesses which classified themselves under hotels and restaurants category. Sampled businesses also included those engaged in construction (50 businesses), transport and communication (34 businesses) and real estate and business activities (32 businesses). Note that out of the 58 businesses which were women-owned or led, most (32 businesses) of them operated in wholesale and retail trade followed by manufacturing (11 businesses).

As per survey results the businesses were asked about various aspects of tax return filing process. This commenced by inquiring who completes and files the tax form return for the business and it was observed that 53% of businesses completed the form internally (by the owner or internal account or finance personnel) while 47% of businesses obtained assistance externally, primarily from an external accountant/chartered account or tax lawyer. Amongst the businesses which completed the tax form internally, 41% of them found the tax form to be easy while 9% stated it was very easy. Around 35% of firms found this to be moderate, while 13% cited difficulty. On the other hand, those businesses which sought external assistance noted that this was mainly due to convenience (38%) and time (24%), followed by ensuring that the form is completed by a tax expert (20%) or not having the understanding within the business (11%).

An important section of the survey was to assess the interaction experience of businesses with the FBR. Businesses were asked whether they had ever interacted with the FBR, and 198 (38%) businesses from all segments confirmed that they had done so. On the other hand, 54% of surveyed businesses stated that they had not ever interacted with the FBR. The main reason for not interacting with the FBR was that businesses felt that they did not need to (206 out of 281); 42 businesses chose not to respond and 43 stated that they did not know. Amongst those businesses which did interact with the FBR, the leading method of communicating was in person at FBR office/Regional Tax Office, stated by 180 businesses (93%). Nineteen percent (19%) also indicated that they communicated with the FBR via telephone, but this was often subsequent to having met an FBR representative in person (as was the case of e-mail). Around 8% of businesses engaged with FBR personnel at locally set up facilitation camps. These findings demonstrate that the main interacting channel is in person, while other methods are utilized during follow-up communication once a point of contact has been established. There is also a lower level of awareness of these other forms of communication.

When inquiring upon the experience of their interaction, responses were gauged based on a set of factors which included: timeliness of response; treatment by FBR personnel; clarity of information provided; resolution to issue and recommendation to use this channel. The first point to note is that not all businesses which confirmed interaction with FBR chose to provide feedback on their experience. For instance, of the 180 businesses which interacted with the FBR in person at FBR office/RTO — the leading method of interaction by surveyed businesses—only 115 businesses chose to provide feedback on their experience. Hence, when probing deeper on interaction experience, a considerable proportion of businesses refrained from providing feedback. The number of businesses providing feedback on other forms of interaction is quite low, and hence, responses are analyzed with caution. Therefore, while the sample of responses related to in-person visits at FBR office/RTO is sufficient, feedback related to other forms of interaction should be viewed as a broad indication, survey results added.

Copyright Business Recorder, 2023