Pakistan’s tax filings reveal a glaring disparity, with a staggering 43.3% of the 5.9 million returns submitted reporting zero taxable income. In contrast, just 3,651 individuals declared earnings exceeding Rs100 million, underscoring the country’s narrow tax base.
Exclusive official data obtained by The News highlights the limited number of high-net-worth individuals, as only a few thousand reported taxable income above Rs100 million in their latest filings for the current fiscal year. Federal Board of Revenue (FBR) Chairman Rashid Mehmood Langrial recently testified before a National Assembly sub-panel, revealing that only 12 individuals declared wealth exceeding Rs10 billion in their tax returns—raising concerns about either widespread tax evasion or a genuine lack of ultra-wealthy individuals in the country.
The total number of tax filers for the 2024-25 fiscal year stands at 5.9 million, comprising 5.8 million individual filers, 104,269 Association of Persons (AOPs), and 87,900 companies. This marks a decline from 6.8 million filers in 2023 and 6.3 million in 2022—far below the estimated potential of 15 million. Alarmingly, despite having at least 300,000 industrial electricity connections, the FBR received tax returns from just 87,000 companies.
A closer look at the tax data reveals that 2.6 million filers—nearly half—declared zero taxable income. In response, the FBR has decided to eliminate the ‘non-filer’ category, replacing it with ‘eligible’ or ‘ineligible’ classifications to regulate significant financial transactions, such as purchasing property worth over Rs10 million or acquiring new vehicles.
A detailed analysis of tax filings shows that:
- 272,112 filers reported taxable income up to Rs400,000.
- 187,741 filers declared income between Rs400,000 and Rs500,000.
- 484,517 filers reported earnings between Rs500,000 and Rs600,000.
- 514,461 filers fell within the Rs600,000–Rs700,000 income bracket.
- 308,278 filers reported income between Rs700,000 and Rs800,000.
- 243,538 filers declared earnings between Rs800,000 and Rs900,000.
- 181,131 filers reported income between Rs900,000 and Rs1 million.
Notably, 1.3 million filers declared income between Rs1 million and Rs5 million, reflecting the skewed nature of Pakistan’s income distribution.
Higher-income brackets saw a steep decline in filers:
- 97,326 filers reported earnings between Rs5 million and Rs10 million.
- 49,359 filers fell within the Rs10 million–Rs50 million range.
- 4,370 filers declared income between Rs50 million and Rs100 million.
- Only 3,651 filers reported income exceeding Rs100 million.
Despite the 5.9 million tax returns collectively accounting for over Rs10 trillion in declared income, the net tax collected stood at just Rs2.9 trillion, raising critical questions about revenue generation and enforcement in Pakistan’s tax system.