Out of 7,444 companies whose record was checked by the SECP, as many as 4,641 filed their annual returns with the SECP. STOCK IMAGE
ISLAMABAD: Over 4,600 companies have cheated tax authorities, as they are still doing business but did not file income tax returns, reveals an exercise conducted by the Securities and Exchange Commission of Pakistan (SECP).
The findings of SECP’s highlight the need to strengthen the enforcement wing of the Federal Board of Revenue (FBR) besides underscoring the urgency to further improve coordination between the relevant government agencies to crackdown on tax evaders.
Out of 7,444 companies whose record was checked by the SECP, as many as 4,641 filed their annual returns with the SECP, according to a statement issued by the commission. These companies did not file income tax returns till January 5 with the FBR. The fact that these 4,641 companies filed their returns with the SECP shows that these companies are still doing business.
The SECP conducted the exercise in response to a query of the FBR. The tax authorities had apprised the SECP about the companies that had satisfied compliance requirements but had not filed tax returns with the FBR. The FBR wanted to confirm their filing status with the SECP for 2014.
The FBR had shared a list of 9,721 companies with the SECP on January 5. These companies did not e-file income tax returns as of January 5, 2015, but had filed tax returns for the tax year 2013. The SECP carried out a comprehensive exercise to check the status of these companies through its online database. It has so far examined the status of 7,444 companies or 76 % from the provided list.
It emerged that about 62% of companies, out of 7,444 companies, have filed their annual returns with the SECP in 2014. The lists of 4,641 compliant and 2,803 non-compliant companies have been shared with the FBR, said the SECP.
It added the status of the remaining 2,277 companies is being checked manually as these companies might not have filed their returns by using the online facility or might not be registered as companies with the SECP.
While talking to The Express Tribune, FBR Chairman Tariq Bajwa said that the tax machinery has already initiated action against these companies. He said notices are being served to non-filer companies and their owners will be taken to task. Bajwa said that as a punitive measure, the FBR would withdraw their sales tax registration, which will make it difficult for these companies to do business.
There were over 64,000 registered companies in Pakistan, of which only 15,000 filed income tax returns by December 31, 2014, which was the due date. The figure was also lower than the previous year when 24,000 companies filed tax returns. Over the years, the FBR has failed to maintain its tax base as companies are gradually slipping from its net.
In order to catch tax evaders, the government also wants include tax evasion as a money-laundering crime but it is facing resistance from parliamentarians.
Published in The Express Tribune, January 17th, 2015.
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What FBR isnt saying, is that the online income tax return forms were changed in September 2014 and is still riddled with bugs. Companies have not been able to fill in the new form, let alone submit any info. Even the officials at the regional tax offices are at a loss to understand the new system 'IRIS'.
Bad administration is no reason for feeling cheated. Morons.