According to the official data released by the Federal Board of Revenue (FBR) on Monday, the taxes collected from the salary-class in the fiscal year 2018 stand at Rs133.36 Billion.
FBR’s tax collection amounted to Rs 111.17 billion in the fiscal year 2017. According to an FBR official, “This (growth) shows expansion in economic activities and availability of more jobs.”
The official further stated that this increase in revenue was due to FBR’s efforts. It was examined through the withholding statements that individuals with taxable-income were out of the tax-net. It was further noted that the increase in salary by the government also resulted in a boosted tax revenue collection. Previously a 10% increase in ad-hoc relief for civil and armed forces employees was announced in the year 2017/18.
According to officials, the income tax returns will be significantly larger for the tax year 2017/18. This is because of the growth in tax collection from the salary income. At present, about 0.75 million salaried individuals are on the active taxpayers’ list.
Some discrepancy in tax collection has been pointed out by the Directorate General of Withholding tax. The directorate has proposed that money disbursed to the salaried individuals must be cross-checked with bank accounts. The report further suggested that mega-corporations should also be audited.
It may be re-emphasized that non-cash perquisites are usually not declared in the statements. It is imperative to study the terms and conditions of service provided in the service contracts/appointment letters.
According to the income tax law, a salary is defined as an amount received by an employee from the hiring authority in the shape of pay, wage or other salaries including leave pay, overtime payment, bonus, commission, and gratuity.