Benefits of being filer in Pakistan by Federal Board of Revenue (FBR)

Benefits of being filer in Pakistan by Federal Board of Revenue (FBR)

The Government initiative encourages all citizens to become tax filers by submitting their income tax declarations, aiming to promote financial responsibility and participation in the country’s tax system. By obtaining filer status with the Tax Authority, individuals unlock a plethora of benefits, with over 150 instances where filers save significantly on taxes. These incentives are continually expanded to maximize advantages for filers. While it’s impossible to list all the benefits comprehensively, here are some highlights:

Benefits of Tax Filer Status:

  1. Property Transactions: Filer status entails a reduced 1% tax rate on the purchase of immovable property compared to 2% for non-filers.
  2. Prize Bonds: Filers pay a reduced 15% tax on prize bond winnings, while non-filers are subject to a higher 30% tax.
  3. Banking Profits: Filer status results in a 15% tax on profits from saving/profit bank accounts, whereas non-filers face a 30% tax rate.
  4. Vehicle Registration: Filers enjoy a 50% tax concession on vehicle registration compared to non-filers.
  5. Import Duties: Filer status attracts a lower 5.5% tax rate on raw material imports versus 11% for non-filers.
  6. Dividend Income: Filers pay a reduced 15% tax on dividend income as opposed to 30% for non-filers.
  7. Customs Clearance: Commercial imports by filers incur a 6% tax at customs clearance, whereas non-filers pay double at 12%.
  8. Auction Sales: Filers pay a 10% tax on sales by auction, while non-filers face a higher 20% tax.
  9. Commercial Supply: Filer status entails a 4.5% tax on commercial goods supply, compared to 9% for non-filers.
  10. Service Provision: Filers have a 10% tax withholding rate on service provision, while non-filers face 20% withholding.
  11. Contract Execution: Non-filers are subject to a 15% tax withholding on contract execution, while filers face a lower 7.5% rate.
  12. Commission Charges: Filers incur a 12% tax on commissions, whereas non-filers pay a higher 24%.

Overall, non-filers face double the tax burden compared to filers across various activities. These taxes are automatically deducted at source, leaving individuals with no means of avoidance. For instance, bank profits are taxed based on filer/non-filer status, and vehicle registration taxes are determined accordingly.

To avail these tax benefits, simply file your income tax return. Our team at Mithan Enterprises is dedicated to simplifying this process for you. Reach out to us, and we’ll ensure your tax return is filed promptly, granting you filer status and its associated advantages in no time.

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