How to Become a Filer in Pakistan: A Step-by-Step Guide for Late 2024 and Beyond
In Pakistan, the importance of becoming a tax filer has grown significantly as the Federal Board of Revenue (FBR) enhances efforts to expand the tax net. For both individuals and businesses, filing taxes is not only a legal obligation but also offers numerous benefits, from reduced withholding tax rates to easier access to loans and other financial services. This guide will provide a comprehensive, step-by-step overview on how to become a filer in Pakistan for late 2024 and beyond, covering all requirements, benefits, and common queries.
What is a Tax Filer in Pakistan?
A tax filer in Pakistan is an individual or business that has registered with the Federal Board of Revenue (FBR) and regularly submits income tax returns. Filers enjoy significant tax benefits, including lower withholding tax rates and exemption from certain penalties. Non-filers, on the other hand, often face higher tax rates, restricted access to government services, and may encounter difficulties in asset and property purchases.
Why Become a Filer in Pakistan?
The benefits of being a filer in Pakistan are substantial:
- Reduced Withholding Taxes: Filers pay significantly lower withholding taxes on banking transactions, property transactions, vehicle purchases, and more.
- Access to Loans: Many banks prefer working with filers, making it easier to secure loans and financing.
- Avoiding Legal Penalties: Filing your taxes regularly keeps you compliant with FBR requirements, avoiding potential fines and penalties.
- Eligibility for Various Services: Filers are eligible for government schemes and financial services often unavailable to non-filers.
Step-by-Step Guide: How to Become a Filer in Pakistan in Late 2024
Step 1: Register on the Federal Board of Revenue (FBR) Portal
- Visit the FBR Website: Start by going to the FBR’s official website and create a new account.
- Register for an NTN (National Tax Number): For individuals, your CNIC (Computerized National Identity Card) number typically serves as your NTN. For businesses, an NTN must be obtained separately.
- Fill in Your Details: Complete the registration form with accurate information, including your CNIC, address, contact details, and any business information.
Step 2: Download and Complete the IRIS System Profile
The FBR’s IRIS system is an online portal for tax filing and profile management. Here’s how to complete it:
- Log in to IRIS: Once registered, log into the IRIS system.
- Complete Your Profile: The system will require details about your income sources, assets, liabilities, and dependents.
- Provide Bank Account Information: This is a mandatory requirement for all filers in Pakistan.
- Submit Your Profile: Make sure all details are accurate and up-to-date before submitting.
Step 3: File Your Income Tax Return
- Navigate to the Returns Section in IRIS: Look for the tax year you wish to file for.
- Choose the Appropriate Return Form: Different forms exist for salaried individuals, businesses, and associations. Select the correct form.
- Enter Income and Expenses: Add details about all your income sources, including salary, business income, property rent, and any other income streams.
- Calculate and Pay Tax (if Applicable): The IRIS system will compute your tax liability based on the provided information. Pay any due tax through the designated online payment channels.
Step 4: Submit Your Tax Return
Once your return is completed and taxes paid, submit the return through the IRIS portal. You’ll receive an automated acknowledgment confirming your submission, making you an official filer in Pakistan.
Requirements and Documents Needed to Become a Filer in Pakistan
To become a filer in Pakistan, ensure you have the following:
- CNIC for Individuals / NTN for Businesses
- Income Details: Bank statements, salary slips, rental income receipts, or other income documentation.
- Asset Details: Information about assets like properties, cars, and investments.
- Liability Information: Any outstanding loans, mortgages, or debts.
- Business Registration Documents (for businesses)
Penalties for Not Filing Taxes in Pakistan
In recent years, the FBR has increased penalties to encourage compliance. Non-filers face penalties such as:
- Higher Withholding Tax: Non-filers often pay up to twice the rate of withholding tax.
- Restricted Access to Services: Certain government services and privileges are restricted for non-filers.
- Fines: Non-compliance can result in significant fines, particularly for higher-income individuals and businesses.
(FAQs)
The deadline for filing tax returns in Pakistan typically falls on September 30 each year, though extensions may occasionally be granted by the FBR. For late filers in 2024, it is recommended to file as soon as possible to avoid penalties.
Once registered on the FBR portal and your profile is complete, filing your tax return typically takes between 30 minutes to 2 hours. However, for first-time filers, additional time may be needed to gather all relevant documents.
Yes, non-residents with income sourced from Pakistan or property in the country are eligible to file. They should register on the FBR portal using their NTN and follow the same process as resident filers.
No, registration as a filer on the FBR portal is free. However, if you are liable for tax, payment will be required upon filing your return.
Yes, the FBR’s IRIS system is designed to be user-friendly, enabling individuals to file without professional assistance. However, complex income sources or business filings may benefit from expert guidance.
Becoming a filer in Pakistan is not just a legal obligation but a financially savvy decision. By following these steps, you can register, file, and enjoy the benefits of being a filer for late 2024 and beyond.
Separated they live in Bookmarksgrove right at the coast