Only 16,000 companies are filing income tax returns out of around 55,000 registered corporate entities, reflecting a huge gap of 39,000 non-filers during the last few years. Sources told Business Recorder on Saturday that the upcoming national tax conference on October 13 (Monday) would chalk out an effective strategy to ensure compliance by the non-filers corporate entities.
The FBR has also decided to carry out desk-audit of all the income tax returns filed by the corporate sector. In this regard, the exercise of desk-audit of top 50 returns in the Large Taxpayers Units would also be discussed in the conference.
According to the FBR data, the tax offices in the field formations are dealing with approximately 55,000 corporate cases. Out of these, merely 16,000 are actually filing returns. The data further revealed that approximately 18,000 corporate cases have been registered with the Regional Tax Office (RTO), Karachi and around 17,000 cases falls within the jurisdiction of RTO, Lahore.
The non-compliance by the corporate entities has to be checked through strict enforcement measures. A proper strategy is needed to review the database of non-operative companies with the help of the Securities and Exchange Commission of Pakistan (SECP).
Sources said that some of the non-filers include non-operative companies and closed units, who are not more in the business. For example, if the Ministry of Religious Affairs had directed travel agents to register as private limited companies for obtaining Haj Quota, such tour operators etc were bound to fulfill this condition for registration as private limited companies. However, those agents who had not obtained the Haj Quota, they would not conduct business as private limited companies. Such types of companies are still registered but not regularly filing their income tax returns.
Similarly, the board has to obtain up-dated data of operative companies from the SECP. There are certain companies, who are not available at their declared addresses. Some companies have declared huge losses whereas others are untraceable. In certain cases, the companies obtained registration, but failed to conduct businesses. The verification exercise is needed to update the database of companies.