Most of top corporate bodies did not file tax returns

ISLAMABAD: With the exception of five sectors, less than half of the top corporate entities in the country have filed income tax returns during the first half of the current financial year.
Only 24 per cent of those which have filed returns have declared income and the remaining 76 per cent have made no contribution to the federal revenue, says the quarterly report of the Federal Board of Revenue (FBR).

A majority of companies listed among the 20 major corporate entities in different sectors have either declared loss or no income.

While expressing concern over how those companies had survived over the years, the report said the FBR was contemplating to carry out a detailed field audit.

The top five sectors contributed 80 per cent of the revenue received from the corporate sector.

This reliance on a few entities was not good for the health of the economy and a detailed investigation was needed to get maximum revenue from the non-compliant entities of the corporate sector, the report said.

Traditional sectors like telecommunication, chemicals and petroleum products have either shown reduction or marginal growth.

Non-traditional sectors like sugar, paper and cement have reported higher growth.

Figures compiled by the Securities and Exchange Commission reveal a poor compliance of 39 per cent by corporate taxpayers and a room for the FBR to broaden the tax base and improve collection by nabbing 31,000 corporate non-filers registered with the SECP.

The number of corporate returns filed during the first half of 2009-10 increased by 32.9 per cent, but the amount of returns decreased by 38.2 per cent.

The number of entities filing returns was 19,910.

Around 70 per cent of income tax originates from the sector.

Overall, the number of income tax statements received during the first half of 2009-10 was 24,637 less, or 1.3 per cent lower than in the corresponding period of last year.

The Federal Board of Revenue said the target for first half had almost been achieved, but meeting the overall target for the year appeared to be an uphill task, particularly for direct taxes at Rs329.3 billion and sales tax at Rs297.4 billion.

To achieve the collection target of Rs1,380 billion, the FBR has prepared a plan to tap the sectors which are not paying taxes, recover income tax arrears, curb smuggling and tighten the Afghan Transit Trade (ATT).

The board has collected Rs615.1 billion in gross and Rs582.1 billion in net terms during the first half of the year.

Source Dawn News