Revolutionary Tax Success: Government collected Rs85 Billion tax from Non-Filers in Just Six Months.

Tax authorities have successfully amassed Rs85 billion over a six-month period, primarily through levies on cash withdrawals and electricity usage from non-filers. Interestingly, the concentration of non-compliance appears to be most prominent in major urban centers, specifically Karachi and Lahore.

A substantial 60% of the Rs85 billion collection derived from these non-filers is attributed to Karachi and Lahore, the country's largest cities. With high urbanization rates, these areas host eight out of 25 Federal Board of Revenue field offices, emphasizing the strategic importance of these locations.

To tackle non-compliance, the government introduced a 0.6% tax on cash withdrawals exceeding Rs50,000 and a 7.5% withholding tax on monthly domestic electricity consumption exceeding Rs25,000 for non-filers. The data indicates that between July and December of the fiscal year, the FBR garnered Rs85 billion from these measures, reflecting a substantial increase of Rs27.5 billion.

The reliance on higher taxes for non-filers has become a key revenue generation strategy, overshadowing efforts to broaden the tax base. This policy, persisting over the past decade, has resulted in a persistently limited tax base

In the initial half of the current fiscal year, the Federal Board of Revenue (FBR) also managed to gather Rs47 billion from telephone and internet users, encompassing both filers and non-filers alike.

While the interim government and military establishment initially aimed to expand the tax base through administrative FBR reforms, the focus has shifted to the separation of the Inland Revenue Service and Customs Service Group, effectively dismantling the FBR.

This restructuring has triggered internal conflicts between the two service groups, potentially jeopardizing the FBR's revenue collection endeavors. Notably, the Large Tax Office Karachi, the country's top revenue-collecting field office, went on strike in protest against the restructuring of the FBR.