Filer vs. Non-Filer: Understanding Taxpayer Status in Pakistan
Introduction
In Pakistan, the Federal Board of Revenue (FBR) classifies taxpayers into two categories: Filers and Non-Filers. Understanding the difference between these statuses is crucial for individuals and businesses to avoid penalties and maximize financial benefits. This article explains the key distinctions, benefits of becoming a filer, and how to register as a filer in Pakistan. Filer vs. Non-
Who is a Filer?
A filer is a person or entity who is registered with the FBR and regularly submits income tax returns. Filers are listed in the Active Taxpayers List (ATL) and enjoy several benefits, including lower tax rates on financial transactions, property, and vehicle purchases.
Benefits of Being a Filer
- Lower Withholding Tax (WHT) on bank transactions, vehicle registration, and property dealings.
- Priority Processing for banking and government-related financial services.
- No Penalties or Legal Issues related to tax compliance.
- Eligibility for Government Contracts and Loans.
Who is a Non-Filer?
A non-filer is an individual or business that has not registered with the FBR or fails to submit annual tax returns. Non-filers face higher tax deductions and restrictions on major financial transactions.
Consequences of Being a Non-Filer
- Higher Withholding Tax (WHT) on banking, property transactions, and vehicle registration.
- Restricted Banking Transactions for amounts exceeding a certain limit.
- Legal Penalties and Fines for tax evasion.
- Limited Access to Financial Services like business loans and credit facilities.
How to Become a Filer in Pakistan
Becoming a filer is a straightforward process. Follow these steps:
Step 1: Register for an NTN (National Tax Number)
- Visit the FBR website (www.fbr.gov.pk)
- Sign up for an account on IRIS (Integrated Risk Information System)
- Provide personal details and obtain your NTN number
Step 2: Submit Your Tax Return
- Log in to IRIS and fill out your annual income tax return
- Declare your income, assets, and deductions
- Submit your return before the deadline
Step 3: Check Your Filer Status
After submission, your name will be included in the Active Taxpayers List (ATL), making you a filer.
Conclusion
Becoming a filer in Pakistan not only helps you save money through lower taxes but also ensures compliance with tax laws. Non-filers face higher tax rates and financial restrictions. If you haven’t registered yet, take the necessary steps to become a filer today and enjoy numerous financial benefits
