Despite 5.9 million tax returns being filed for the fiscal year 2024-25, official data reveals that 43.3 percent of filers reported zero taxable income, highlighting a significant gap in the country’s tax base.

The Federal Board of Revenue (FBR) reported that only 3,651 individuals declared taxable income exceeding Rs. 100 million, while just 12 individuals disclosed wealth above Rs. 10 billion in their returns for the fiscal year 2023-24.

The number of tax filers has dropped from 6.8 million in 2023 to 5.9 million this year, with individual filers accounting for 5.8 million, 104,269 filings from Associations of Persons (AOPs), and 87,900 from companies. The FBR also noted a concerning trend in the industrial sector, where out of 300,000 industrial electricity connections, only 87,000 companies submitted tax returns.

The data shows a wide disparity in declared incomes:

• 1.3 million filers reported income between Rs. 1 million and Rs. 5 million.
• Only 97,326 filers declared income between Rs. 5 million and Rs. 10 million.
• A mere 49,359 filers reported income between Rs. 10 million and Rs. 50 million.
• Just 4,370 individuals declared earnings between Rs. 50 million and Rs. 100 million.
• Despite the total declared income exceeding Rs. 10 trillion, the net tax collected stood at Rs. 2.9 trillion, raising concerns about the effectiveness of tax collection mechanisms.

The FBR’s data underscores the challenges in broadening the tax base and ensuring compliance, particularly among high-income earners and businesses. The decline in the number of filers and the high percentage of zero-tax returns reflect persistent issues in Pakistan’s tax system, which continues to rely heavily on indirect taxes to meet revenue targets.