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Over 10,000 companies paid no tax last year: report
By Mubarak Zeb Khan
ISLAMABAD: As many as 10,639 corporate taxpayers have paid no taxes to the income tax department in the year 2013. Though these companies filed tax returns, but they paid zero taxes.
These facts were revealed in a report prepared by the Islamabad-based think tank Sustainable Development Policy Institute (SDPI) and released on Friday.
The total number of corporate taxpayers which filed tax returns stood at 23,845 against 61,989 companies registered with the Securities and Exchange Commission of Pakistan (SECP).
Further analysis shows that only 13,206 companies (21 per cent) paid income tax in the tax year 2012-13, meaning that 62 per cent (38,144 companies) of the companies registered by the SECP were non-tax compliant.
Analysis of returns reveals that 62 per cent of SECP-registered companies are non-tax compliant
The tax contribution of the 21 per cent who did pay their taxes was Rs315.85 billion or 43 per cent of the total direct tax collection for the year 2012-13.
The state’s own enterprises were revealed to be the highest tax payers. Oil and Gas Development Company (OGDCL) was the largest taxpayer with a total payment of Rs36.96 billion, followed by Pakistan Petroleum, which paid taxes worth Rs15.40 billion.
Other large taxpayers included Habib Bank Limited (HBL) with Rs11.78 billion, the Government Holdings Company with Rs 10.75 billion and Fauji Fertilizer with Rs9.90 billion.
The Muslim Commercial Bank, Pakistan State Oil, United Bank Limited, Pak-Arab Refinery, ENI, Kot Addu Power, BHP Petroleum, Allied Bank, Bank Al-Habib, Pakistan Telecommunication Authority, Pakistan Oil Fields and Unilever were also among the billion-taxpayer club, according to the report.
Only 45 companies paid taxes in excess of one billion rupees and their tax contribution amounted to Rs192.78 billion.
Thirty-four companies paid between Rs 500 million and Rs1 billion in taxes and their tax contribution added up to Rs22.854 billion. Another 242 mid-category companies paid taxes between Rs 100 million and Rs500 million, with a total tax contribution of Rs51.509 billion. Consequently, out of the FBR’s total direct tax collection, Rs267.24 billion was contributed by only 321 companies.
A total of 26,600 or 41 per cent of all registered businesses, either companies or Associations of Persons (AOPs) paid zero tax to FBR.
AOPs are registered in the provinces under the Partnership Act of 1932.
According to available estimates, the total figure of registered AOPs countrywide is 124,000. Of the total, only 40,700 or 33 per cent filed tax returns and among these 15,961 AOPs paid zero rupees in tax, while six filed returns in the negative.
Only 24,733 or 20 per cent of the AOPs paid any amount of money as tax and the total tax contribution of AOPs stood at Rs 28.83 billion, 4 per cent of total tax revenue.
Published in Dawn, May 31th, 2014
By Mubarak Zeb Khan
ISLAMABAD: As many as 10,639 corporate taxpayers have paid no taxes to the income tax department in the year 2013. Though these companies filed tax returns, but they paid zero taxes.
These facts were revealed in a report prepared by the Islamabad-based think tank Sustainable Development Policy Institute (SDPI) and released on Friday.
The total number of corporate taxpayers which filed tax returns stood at 23,845 against 61,989 companies registered with the Securities and Exchange Commission of Pakistan (SECP).
Further analysis shows that only 13,206 companies (21 per cent) paid income tax in the tax year 2012-13, meaning that 62 per cent (38,144 companies) of the companies registered by the SECP were non-tax compliant.
Analysis of returns reveals that 62 per cent of SECP-registered companies are non-tax compliant
The tax contribution of the 21 per cent who did pay their taxes was Rs315.85 billion or 43 per cent of the total direct tax collection for the year 2012-13.
The state’s own enterprises were revealed to be the highest tax payers. Oil and Gas Development Company (OGDCL) was the largest taxpayer with a total payment of Rs36.96 billion, followed by Pakistan Petroleum, which paid taxes worth Rs15.40 billion.
Other large taxpayers included Habib Bank Limited (HBL) with Rs11.78 billion, the Government Holdings Company with Rs 10.75 billion and Fauji Fertilizer with Rs9.90 billion.
The Muslim Commercial Bank, Pakistan State Oil, United Bank Limited, Pak-Arab Refinery, ENI, Kot Addu Power, BHP Petroleum, Allied Bank, Bank Al-Habib, Pakistan Telecommunication Authority, Pakistan Oil Fields and Unilever were also among the billion-taxpayer club, according to the report.
Only 45 companies paid taxes in excess of one billion rupees and their tax contribution amounted to Rs192.78 billion.
Thirty-four companies paid between Rs 500 million and Rs1 billion in taxes and their tax contribution added up to Rs22.854 billion. Another 242 mid-category companies paid taxes between Rs 100 million and Rs500 million, with a total tax contribution of Rs51.509 billion. Consequently, out of the FBR’s total direct tax collection, Rs267.24 billion was contributed by only 321 companies.
A total of 26,600 or 41 per cent of all registered businesses, either companies or Associations of Persons (AOPs) paid zero tax to FBR.
AOPs are registered in the provinces under the Partnership Act of 1932.
According to available estimates, the total figure of registered AOPs countrywide is 124,000. Of the total, only 40,700 or 33 per cent filed tax returns and among these 15,961 AOPs paid zero rupees in tax, while six filed returns in the negative.
Only 24,733 or 20 per cent of the AOPs paid any amount of money as tax and the total tax contribution of AOPs stood at Rs 28.83 billion, 4 per cent of total tax revenue.
Published in Dawn, May 31th, 2014
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