You must have heard non-filer or filer most commonly used now days, especially if you are in a Bank, Motor vehicle or property registration authority office. Lets talk something about this hot issue.
Assume yourself in a well perceived tax free environment where you earn and live a happy life. In Pakistan, you could be any one having this much happy life without hearing a word about tax, tax authorities or FILER of returns.
Continuing above story, as your business is doing well, you have enough money for your kitchen expenses even for coming years, watching TV at your home, seen an advertisement for all new Honda Civic just in your budget, suddenly the car you drive seems too old to drive and you quickly decide to replace that old loose motor with ALL NEW HONDA CIVIC that’s your dream car.
You quickly showed up to the nearest Honda show room and asked for the car you seen on TV, the person there explained everything about the car and its features and not to miss its luxury. In the last the person asked you about your NTN and continued to ask whether you are filer etc.
You immediately had a feeling that something serious going to happen with this man, as he asked something very personal that too in such common way. Who are you to ask my tax matters and why should I tell you whether I file my returns or not.
The person calmly replied sir, I need to know your filer status, in case you are non-filer then we will deduct more tax from you. More? how much more ?
Without saying anything further you moved on to next Honda showroom thinking the person was making fool out of you, the person at next showroom repeat the same thing. You called your friend (working in a local bank) he confirmed the same thing.
So, let’s discuss the problem that Government of Pakistan has created for happy living nation. IF YOU DON’T FILE YOU INCOME TAX RETURNS, THEN READY TO PAY DOUBLE TAX”.
Without commenting on validity of the above step lets discuss what transactions are covered under this so called double tax, if you are non-filer of Income Tax returns.
- Very well known, tax on cash withdrawal (0.3% of the cash withdrawal in excess of Rs.50,000/- in a day, if you are non-filer then 0.3% in case of any banking transaction)
- Buying brand new car (at the time of registration, Rs 150,000/- which would become Rs. 450,000/- in the case of non-filer)
- Buying new house (at the time of transfer of tax @ 0.5% of the value would become 1% of the value for non-filer)
- Dividends (normal tax is 12.5%, 17.5% for non-filer)
- Profit on debt (normal tax is 10% , 15% for non-filer)
- Supply of goods (normal tax is 4.5%, 6.5% for non-filer)
- Rendering of services (normal tax is 10%, 15% for non-filer)
(The list is intentionally kept brief in order to speak the idea to the readers)
Now, the idea of Happy life in Pakistan is lost somewhere between filer and non-filer, you can’t be happy and filer at the same time.
Sharjeel Ayub & Co. Chartered Accountants provides services from obtaining NTN (National Tax Number) to make your name appear in FBR’s filers’ list.