LAHORE: The process of e-filing of tax returns has failed to gain momentum despite all out efforts of the Federal Board of Revenue (FBR) to make it popular among taxpayers to ensure tax compliance for a higher revenue generation, said Board sources.

They said repeated attempts to make e-filing of tax returns have proved futile and the Board has failed to attract maximum taxpayers towards the system despite organizing workshops and online learning spells. So much so, the time-saving and money-saving features of the project have failed to allure the taxpayers. Further, they said the taxpayers do not have sufficient technical knowledge about taxes.

The acceptance level of the taxpayers is very low, which is directly impacting the growth of revenue generation, as lack of financial and literacy issues are hampering the promotion of e-filing of returns. The sources further added that the application introduced by the Board for easy filing of returns have also failed to attract the general public, which even offers the facility of calculating tax liability out of the income of a taxpayer.

It may be noted that the Board had introduced the concept of e-filing of returns back in 2005 after launching an e-tax filing portal. The objective was to encourage taxpayers to file their returns online.

The sources said the number of taxpayers availing the facility of e-filing runs into a few thousand despite the passage of one and a half-decade. There is a dismal trend of obtaining certificates from National Institutional Facilitation Technologies, they said, adding that the estimated show that Pakistan faces tax loss of $10.4 billion due to tax avoidance, which is 39.68% of the total tax revenue. Meanwhile, they said, the loss of tax revenue as the percentage of GDP is 4.4% in Pakistan, which is much larger as compared to 1.13% in the US and 0.75% in China.

The sources said a poor response from the taxpayers towards e-filing of returns has also resulted into a constant rise in the cost of processing tax collection. However, sources added that still a slight increase in the tax to GDP ratio from 9.6 in 2006-07 to 11.4 in 2019-20 is being attributed to the introduction of the e-tax filing system by the high-ups of the Board, which is not fair.

Copyright Business Recorder, 2021