To file or not to file, that is the question. Is it better to pay the taxes – as most of us do in a number of ways – but not file tax returns? Is it better to retain any profits you may make and pay higher taxes than to file taxes and pay relatively lower taxes? If Federal Board of Revenue (FBR) is to be believed it is certainly better – indeed there are certainly a number of benefits of filing taxes – as a recent FBR advertisement proclaimed: “Returns or losses, you decide.”
Indeed, the moment of decision is drawing nearer. 30th November 2018 is the last day for filing tax returns and you will have to decide before that. Here are is the comparison of taxes and duties, benefits or losses you will have to face depending on whether or not you are tax filer recently published by FBR:
Active Taxpayer List (ATL)
Tax filer: Your name will be included in the ATL immediately.
Non-filer: You will not be able to have your name included in ATL for an entire year.
Withholding Tax (WHT)
Filer: You will have to halve the WHT.
Non-filer: You will have to pay 1.5-2 times the taxes.
Immovable Property buying
Filer: No bar on the price of immovable property you buy.
Non-filer: You can’t buy immovable property worth more than PKR 5 million.
Filer: On imports of raw material, you will have to 5.5% in taxes, while commercial imports require 6% in taxes.
Non-filer: On raw material imports, the tax will be 8%, while the commercial imports require 9% in taxes.
Filer: You will be taxed 12.5% on dividends.
Non-filer: You will be taxed 15% on dividends.
Banks and Saving Schemes
Filer: Banks and Saving Scheme profits will be taxed at 10%.
Non-filer: Banks and Saving Scheme profits will be taxed at 15%.
Supply of goods to government and companies
Filer: The goods will be taxed at 4.5%.
Non-filer: The goods will be taxed at 9%.
Filer: The contracts will be taxed at 7.5%.
Non-filer: The contracts will be taxed at 15%.
Prize bond winnings
Filer: The prize bond winnings will be taxed at 15%.
Non-filer: The prize bond winnings will be taxed at 25%.
Filer: The commissions will be taxed at 12%.
Non-filer: The commissions will be taxed at 15%.
Annual token tax on vehicles
Filer: Annual token tax on vehicles ranges between 800 and 10,000.
Non-filer: Annual token tax on vehicles ranges between 1,200 and 30,000.
WHT on automobile registration
Filer: Withholding Tax (WHT) on automobile registration ranges between PKR 15,000 and PKR 250,000.
Non-filer: WHT on automobile registration ranges between PKR 25,000 and PKR 400,000.
Bank transactions greater than PKR 50,000
Filer: Bank withdrawals greater than PKR 50,000 will be taxed at 0.3%.
Non-filer: Bank withdrawals greater than PKR 50,000 will be taxed at 0.6%.
Filer: Property transfer will be taxed at 0.1% of the value of property.
Non-filer: Property transfer will be taxed at 0.2% of the value of property.
Purchase of property
Filer: For property priced higher than PKR 4 million, the total amount will be taxed at 2%.
Non-filer: For property priced higher than PKR 4 million, the total amount will be taxed at 4%.
This forms all the big differences between filers and non-filers. Are you a filer or a non-filer? Do you intend to become a filer? If you have any questions about it, you can talk to us in the comments section. You can also head to the Zameen Forum for a detailed conversation.