Talk about taxes and it’s pretty much a guarantee that Pakistanis will have a strong opinion. Be it sales tax, income tax, property tax, or any other tax you can think of, taxes are a constant source of discussion whether the topic is the need to utilize them properly or the billions that are evaded by the elite of this country.
Nevertheless, knowing about them is important as taxes directly impact a country’s earnings and also affect the GDP.
Here’s where the Federal Board of Revenue (also called the FBR) comes in. The board is responsible for regulating and collecting all kinds of taxes levied on the common man.
Despite being central to Pakistan’s income and treasury, people don’t know much about the FBR apart from a surface level understanding.
Here’s a short introduction and history.
Originally known as the Central Board of Revenue, the tax watchdog has seen a lot of changes since its inception back in 1924, when it was formed “through the enactment of the Central Board of Revenue Act, 1924″.
A revenue division was consequently formed under Ministry of Finance. Following Pakistan’s independence, the Board was amalgamated with the Ministry of Finance in August 1960.
After the 1973 constitution was finalized, the department underwent further changes for streamlining its operations. A new post of “Chairman FBR” (currently held by Mr. Tariq Mahmood Pasha) was created with the status of “ex-officio Additional Secretary”. Previously this role was under the Secretary Finance.
FBR’s Role and Responsibilities
In a nutshell, FBR is supposed to:
- Investigate cases related to tax evasion, money laundering, and general tax-related crimes.
- Audit entities on cases of unreported assets, income or expenditure.
- Pass legislation related to taxes and administer tax policies for Pakistan.
- Act as a revenue collection body.
The revenue collection board works through Regional Tax Offices (RTO) and Large Taxpayer Units.
Departments Under FBR
It is further divided into different wings including:
- Inland Revenue Service, it takes care of domestic taxes such as Federal Excise Duty, Income Tax, Sales tax etc. It is also the central wing of the FBR.
- Pakistan Customs Service collects import-related taxes including import duties. It also regulates international trade, based on the restrictions and laws levied by the government.
- Administration Wing
- Taxpayer Audit Wing
- Legal Wing
- Facilitation and Taxpayer Education Wing
- Strategic Planning and Reform Statistics Wing
- Human Resource Management
- IT Wing
- Accounting Wing
- Research, Analysis and Reforms Wing
You can learn more about FBR’s wings and the people behind them here.
Next is a step by step guide to filing your income tax returns. If you are a government employee or a business owner you will need a National Tax Number to file your taxes online.
However, you can register using the following process.
Filing Income Tax Returns Online For Individuals and Businesses (Includes Iris Registration)
First things first, here’s a list of entities and people that are required to file for tax returns:
- Every company;
- Every person (other than a company) whose taxable income for the year exceeds PKR 400,000;
- Every non-profit organization as defined in clause (36) of section 2;
- Every welfare institution approved under clause (58) of Part I of the Second Schedule;
- Every person who has been charged to tax in respect of any of the two preceding tax years;
- Every person who claims a loss carried forward under this Ordinance for a tax year;
- Every person who owns immovable property with a land area of two hundred and fifty square yards or more or owns any flat located in areas falling within the municipal limits existing immediately before the commencement of Local Government laws in the provinces; or areas in a Cantonment; or the Islamabad Capital Territory;
- Every person who owns immoveable property with a land area of five hundred square yards or more located in a rating area;
- Every person who owns a flat having covered area of two thousand square feet or more located in a rating area;
- Every person who owns a motor vehicle having engine capacity above 1000 CC;
- Every person who has obtained National Tax Number;
- Every person who is the holder of commercial or industrial connection of electricity where the amount of annual bill exceeds rupees five hundred thousand;
- Every person who is registered with any chamber of commerce and industry or any trade or business association or any market
- committee or any professional body including Pakistan Engineering Council, Pakistan Medical and Dental Council, Pakistan Bar Council or any Provincial Bar Council, Institute of Chartered Accountants of Pakistan or Institute of Cost and Management Accountants of Pakistan;
- Every individual whose income under the head Business exceeds PKR 300,000 but does not exceed PKR 400,000 in a tax year.
Consult this article to calculate how much income tax you’re liable to pay.
Next, if you’re registering as an individual, you will need to register at FBR’s online e-enrollment system called Iris.
Click here to get to the login page.
Click on “Registration for Unregistered Person” if you haven’t registered. You will need to fill out the following form which will be verified using SMS or Email (sometimes both):
If you don’t get the SMS/Email right away, you may need to wait for a few days as it takes longer some times.
Login with your registration number and password sent on your email. Note that your registration number is your CNIC (without dashes).
You can now file your wealth statement and income tax returns. Here’s a guide to filling out the details in your wealth statement/income tax returns. An additional FAQ is available here.
You can also check out the following video guides for this:
Income Tax Returns
Active Tax Payers List
If you’re curious about the ratio of taxpayers in Pakistan, or if you want to know if you’re included in the list or not, you can check for your name in the Active Taxpayers list.
Click here to access the Active Taxpayers list, using FBR’s search tool.
Out of Pakistan’s 207.7 million population, 1,411,724 are included in the active income tax filer list (as of 2016). This is less than 1% of the total population (0.0068%).
You can find a complete list of active taxpayers here.
You can call FBR at: 051 111 772 772 or +92 51 111 772 772
Email them at: [email protected]
The helpline is available from 9 AM to 11 PM.