Taxes

Corrupt Politicians? Only 21% Employees Of Top 54 Companies Pay Their Taxes!

Federal Board of Revenue (FBR) has shortlisted 200,906 non-tax paying employees of the leading 54 corporate organizations in Pakistan. Although the initiative has been considered a positive one but it reflects rather candidly upon decades of poor monitoring practices maintained by the tax authorities.

The number cited by FBR is huge as these individuals constitute approximately 79% of the total employee base (as of 2016) of the country. Therefore, it is very clear why there are bottlenecks in overall tax returns.

Also Read: Government increases service tax up to 19.5% on internet services

The number of tax paying employees stood at 53,579 forming only 21% of overall employee strength standing at 254,485. During 2016, total population that filed their income tax returns stood at 1.2 million. Thus, a meager 0.8% of the population can be tracked through their residential or work address.

These bottlenecks were highlighted by Pakistan Revenue Automation (PRAL), which indicated major differences between actual and desired tax numbers.

Comparing tax filing ratio with India (4.5%), China (80%) and France (58%) Pakistan’s ratio is very low.

Quick Read: FBR has a mind of its own – Additional withholding tax for telecom sector

Penalties for not filing tax returns

The minimum penalty for not filing returns/statements/wealth statements is as low as Rs5,000. However, it goes up to 25% of total payable tax for the whole year. There are two options for the non-filer, either declare your total income per annum for tax evaluation or it will be termed as ex parte by the tax authorities.

Another FBR official revealed their plan stating that a separate Facilitation and Taxpayers Education (Fate) Wing has been established. The purpose of this is to track large public and private sector companies which do not have a good tax filing ratio. One of the officials also said:

“We have chalked out a plan to approach these companies to extend facilities for filing of tax returns”

Breaking down the location of these non-filing companies, it was found that tax departments in Karachi oversees 25 entities. Department of Lahore monitors 17 companies, Islamabad has 5 companies under it, Rawalpindi has 3, Multan has 2 and Faisalabad with only one company to oversee.

Read More: FBR imposes a 0.5% tax on e-commerce companies

Please find below the city-wise and company-wise breakup of the number of employees who did not file their tax returns (during 2016):

Karachi

  • Habib Bank: 6,478 (57pc)
  • Aga Khan Hospital Medical College Foundation : 9446 (90pc)
  • Civil aviation authority: 7,240 (77pc)
  • Meezan Bank: 6, 255 employees (72pc)
  • Pakistan Steel Mills Corporation (Pvt) Ltd: 5,909 (74pc)
  • K-Electric Ltd: 5,962 (76pc)
  • Sui Southern Gas Company Ltd: 4,605 (68pc)
  • Karachi Port Trust: 4,527 (84pc)
  • Karachi Electric Provident Fund: 3,905 (75pc)
  • Standard Chartered Bank (Pakistan) Ltd: 2,940 (65pc)
  • Faysal Bank Ltd: 2,699 (66pc)
  • Indus Hospital: 3,433 (94pc)
  • Pakistan Space and Upper Atmosphere Research Commission: 1,970 or 60pc
  • NIB Bank Ltd: 2,137 (69pc)
  • Habib Metropolitan Bank: 1,025 (36pc)
  • B L Harbert International (Pvt) Ltd: 2,764 (98pc)
  • JS Bank Ltd: 1,884 (70pc)
  • Orient Energy Systems (Pvt) Ltd: 2,439 (92pc)
  • City Schools (Pvt) Ltd: 2,218 (85pc)
  • Pakistan Defence Officers Housing Authority: 2,086 (84pc)
  • Aga Khan University: 1,885 (77pc)
  • Kashf Foundation: 1,780 (85pc)
  • Philip Morris (Pakistan) Ltd: 1, 766 (84pc)
  • State Life Insurance Corporation of Pakistan: 2,490 (53pc)

Lahore

  • JDW Sugar Mills: 9,763 employees (98pc)
  • MCB Bank: 5,143 (63pc)
  • Crescent Bahuman Ltd: 7,863 (99pc)
  • Sui Northern Gas Pipelines Ltd: 6,737 (85pc)
  • Educational Services (Pvt) Ltd: 4,333 (84pc)
  • Coca Cola Beverages Pakistan Ltd: 4,113 (86pc)
  • Nestle Pakistan Ltd: 3,496 (74pc)
  • Business and Communication Systems (Pvt) Ltd: 4,249 (97pc)
  • Virtual World (Pvt) Ltd: 4,084 or 97pc
  • Sefam (Pvt) Ltd: 4,051 (97pc)
  • Punjab Rural Support Programme: 3,786 (96pc)
  • Royal Airport Services (Pvt) Ltd: 2,655 (98pc)
  • Treet Corporation Ltd: 1,995 employees (87pc)
  • Cool Industries (Pvt) Ltd: 2,140 (98pc)
  • Technical education and vocational training authority: 1,672 (78pc)
  • Punjab Provincial Cooperative Bank Ltd: 1,767 (83pc)
  • Metro-Habib Cash & Carry Pakistan (Pvt) Ltd: 1,917 (92pc)

Rawalpindi and Islamabad

  • Oil and Gas Development Company Ltd: 7,685 employees (81pc)
  • Askari Bank Ltd: 5,150 (68pc)
  • Pakistan Television Corporation Ltd: 3,283 (81pc)
  • Fauji Fertilizer Company Ltd: 2497 (63pc)
  • Hillcrest Solutions (Pvt), Ltd: 3,357 (96pc)
  • National Engineering and Scientific Commission (HQ): 1,842 (60pc)
  • Pakistan Mobile Communication Ltd: 1,590 (9pc)
  • National Engineering Services Pakistan (Pvt) Ltd: 1,511 (73pc)

Multan and Faisalabad

  • Bank Al-Habib Ltd: 6,086 (73pc)
  • Multan Electric Power Company Ltd: 2,980 (90pc)
  • Rafhan Maize Products Company Ltd (Faisalabad): 3,048 (93pc)

 

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