Government Crackdown on Non-Filers: Time to Get Registered.

The government of Pakistan has started to get serious with those who do not file their tax returns, and the people who do not file their tax returns are called "non-filers." Regardless of how much tax they pay, the non-filers are still known as non-filers if they do not formally inform the government about the income and taxes they are paying by filing their taxes. The government is attempting to enforce compliance with the tax regulations and ensure that everyone pays their fair share. Therefore, now, a substantive campaign has been launched against all non-filers.

In this blog, you will discover what non-filers are, why the government is getting serious, what issues non-filers may run into, and how you can go about becoming a filer.

What Does Non-Filer Mean?

A non-filer is an individual who has income but does not file a tax return with the Federal Board of Revenue (FBR). When you file your return with the FBR, you are telling them how much money you earned for the year and how much tax you paid. Many people think that because they were subject to a tax deduction from their salary or bank that, they don’t need to do anything else. This is incorrect. You are still obligated to file your return to be classified as a "filer". 

The government identifies filers and the list of filers kept in the government is a record of individuals who have met their obligation to file a tax return. If you do not file your return, then you do not exist on that list and will be treated as non-filer.

Why Is the Government Taking Action Against Non-Filers?

The government seeks fairness. Some individuals complete tax returns, and some just bypass the process altogether, which is unfair to those who do everything right. Non-filers usually pay less in taxes and can avoid taxes completely, while the honest do so through appraisal and report taxes based on the current market value. In effect, non-filers are hurting our economy.

The government wants everyone to comply, so that non-filers become subject to the system, and force them to participate. The government also has implemented rules that make it increasingly difficult to avoid taxing, and to force non-filers to register and file.

What Problems Do Non-Filers Face?

Being a non-filer can lead to a lot of trouble. For example, if you take money out of your bank account, you will pay more taxes compared to a filer. When a non-filer withdraws more than Rs. 50,000 in a day, any amount over Rs. 50,000 will incur additional taxes (0.6% tax extra just for being a non-filer). If you want to buy a car, you may be prohibited from buying a car greater than 800cc. 

Non-filers may also face issues purchasing property. Even if they can purchase property, they will have to pay double the taxes compared to a filer (which are usually very low). If a non-filer earns interest from a bank on their savings, they will be taxed 30% as a non-filer, while a filer will be taxed 15%. These problems will continue to pile up when you remain a non-filer.

What Are the Benefits of Being a Filer?

There are many reasons to become a filer. The major advantage is that you are taxed less, so whether you are buying a car, property, or even just doing a series of large bank transactions, you get to save money since filers pay lower tax rates. 

Another advantage is that filers encounter fewer issues conducting business. You can sign agreements more easily, open bank accounts, and apply for contracts. Many government and private jobs prefer individuals who carry tax-filing status.

The other major advantage is that you should feel proud of doing your civic duty. When you file your taxes, you contribute to the growth of your country. The money that the government receives from taxes is used to create schools, hospitals, and roads, and by filing taxes, you are helping the entire country. You are playing your role as a citizen and are therefore contributing to the people and places that can benefit from your taxes.

How Can You Become a Filer?

It is quite easy to become a filer. First you need a National Tax Number (NTN). You can get that by going to the FBR's site or visiting your closest tax office. If you have a CNIC number, you are able to get registered online. 

Next, you need to collect information for your income. If you are a salaried person, a salary slip should be enough. If you have a business, you need to keep records of your income and expenses. 

After that you can go to FBR's IRIS portal, which is an online system to file your income tax return. In that process you create your account. You are basically reporting your income tax to the Govermnet, which states how much you earned and what tax you paid. The system is user friendly and should only take a short period of time. 

If you are still stuck, you should hire an income tax advisor or consultant. They can work with you through the process step by step.

Conclusion

The government is starting to crack down on non-filers. This is only the beginning. There will only be more rules, and there will only be more penalties if people don’t register and file. If you are a non-filer, now is the time to act. 

Becoming a filer is not difficult. It will save you money, give you peace of mind, and do your part as a responsible citizen. You will also enjoy many privileges that non-filers do not get to enjoy.

Visit the FBR website today, get your NTN and file your return. It is your obligation, your entitlement, and your opportunity to contribute to your country and yourself.