ISLAMABAD: The latest number of income tax return filers as per the Active Taxpayers List (ATL) now stood at 4.2 million and may touch the figure of 5 million.

Senior tax expert Asif S Kasbati, who is also a Member of the ICAP Fiscal Laws/Income Tax Committee informed that the Federal Board of Revenue (FBR) data revealed Income Tax ATL status for the Tax Year 2022 stood at over 4.2 million as on July 27, 2023. However, it is expected the ATL figure may reach 5 million by February 28, 2024 or even earlier based on the FBR efforts.

Kasbati highlighted that the ATL for Tax Year (TY) 2018 reached 1.8 million, which increased to 2.4 million for TY 2019 and later further increased to 2.9 million for tax year 2020 and 4million in TY 2021.

ATL: number of return filers hits 3.58m mark

Last tax year 2021, it was also 4 million and this tax year 2022 all previous records have been broken and ATL now stood at 4.2 million.

Kasbati, of PBC Core Tax Committee, calculated that the TY 2022 ATL is expected to be reached to 5 million by Feb 28, 2024 due to raise in withholding tax rates through Finance Act 2023, in almost all cases.

He said that the FBR can achieve the figure of 5 million taxpayers under the ATL through broadening the tax base process by data mining of withholding taxes, coordination with NADRA for Family Tree / Provisional Assessment and analysis of SECP companies’ data and Provincial Revenue Authorities of Properties & Motor Vehicles and bringing maximum big retailers into tax net.

To document under the Active Taxpayer’s List, he elaborated that the non-filer has to file to first return for TY 2023, followed by a penalty of Rs 1,000 to open last year’s IRIS return filing window and then file return to be in ATL to avoid double withholding tax rates applicable on non-filers, he said.

The senior tax consultant recalled that FBR had committed to register 300,000 new taxpayers, which has been declared as an unrealistic figure by certain professionals.

However, as per Kasbati analysis, for tax year 2022 there would be 4.5 million taxpayers on the ATL as compared to 4 million in 2021, reflecting a remarkable increase from last year. The projections are based on the average progressive ratio of 3% per month.

Kasbati opined several people file return just to remain on the ATL, without paying much income tax, hence, FBR has to analyze how many taxpayers are actually paying taxes. He recalled that few years ago, FBR had published the “Income Tax Filer Directory with tax paid by each taxpayer” as well Parliamentarian Tax Directory, which should be published for later years as well, he added.

Copyright Business Recorder, 2023