FBR to launch audit drive as 1.7 million tax filers show nil income

ISLAMABAD: Millions of Pakistanis filed their tax returns this year, but a surprising number claimed they earned nothing at all. This trend has caught the attention of the Federal Board of Revenue (FBR) as it moves to tighten scrutiny.

According to official data cited by The News, around 1.7 million of the 5.5 million tax returns submitted so far have declared nil income. This has prompted the FBR to launch an extensive review of tax declarations and prepare for a large-scale audit operation in the coming weeks.

Thousands show lower income than last year

Sources within the FBR revealed that nearly one million individuals reported lower income this fiscal year compared to the previous one. Officials suspect that a significant portion of these cases may involve misreporting.

“We have found 977,000 filed returns where the declared income was shown as less than in the last fiscal year,” an official said, adding that several exporters had even claimed losses despite active business operations. The FBR plans to issue notices to such individuals after the October 31 deadline, giving them a chance to revise their returns before legal action is taken.

Audit drive and data-based scrutiny

According to Geo News, to strengthen its enforcement measures, the FBR has hired 2,000 auditors for an intensive audit campaign aimed at detecting false declarations. Despite the large number of nil-income filings, officials say the data collected from these submissions remains valuable and will be used to expand the country’s narrow tax base.

“The information we’ve obtained from these returns will help us identify potential taxpayers and turn this data into revenue,” a senior source explained.

The FBR has already sent multiple reminders to filers, including one addressed to around 853,000 individuals, warning them that the tax authority possesses detailed information about their financial transactions. The messages also contained assumption-based income estimates, urging taxpayers to file accurately to avoid further scrutiny.

Warning of action against false filers

FBR Chairman Rashid Mahmood Langrial confirmed that the authority would move firmly against those found concealing income. “The FBR possesses extensive data and will proceed against those who choose to hide their income,” he said.

Langrial noted that the department would send two notices before conducting an ex parte assessment against unresponsive taxpayers.

A senior official also clarified that the FBR was not overly concerned about genuine nil-income declarations but had identified several cases where such claims conflicted with evidence of major financial transactions. “The law will take its course,” the official said.

The FBR has extended the filing deadline to October 31, anticipating up to three million additional returns. However, with a growing number of questionable filings and lower income declarations, the tax authority now faces an uphill battle to enforce compliance and restore trust in the system.