Who is a Filer?
A filer is a taxpayer who has registered with the Federal Board of Revenue (FBR) in Pakistan and files an income tax return. Filing a tax return is mandatory for filers, and it is an essential step towards ensuring compliance with tax laws and regulations in the country. To become a filer, an individual or business must obtain a National Tax Number (NTN) from the FBR
Advantages Of Being Filer?
There are several benefits of being a filer in Pakistan. Here are some of the key benefits:
Avoiding penalties: Filing your tax return on time can help you avoid late filing penalties and ensure compliance with tax laws. Failure to file a tax return can result in penalties and legal action by the tax authorities.
Access to credit: Being a filer can help you access credit facilities from banks and other financial institutions. Many banks require a tax return as proof of income before approving a loan or credit facility.
Visa application: Some countries require a tax return as a part of the visa application process. Being a filer can make it easier to apply for a visa and increase your chances of approval.
Business opportunities: Being a filer can increase your business opportunities, especially if you are a supplier or service provider to large organizations or government agencies. Many organizations require tax compliance as a prerequisite for doing business.
Trade licenses: Many government agencies require a tax return as proof of income before issuing a trade license. Being a filer can make it easier to obtain a trade license and start a business.
Difference Between Filer and Non Filer?
In Pakistan, taxpayers are categorized as either filers or non-filers. A filer is a taxpayer who has registered with the Federal Board of Revenue (FBR) and filed their tax return for the current tax year, whereas a non-filer is a taxpayer who has not filed their tax return for the current tax year.
Filers and non-filers have different tax obligations and benefits in Pakistan. For example, a filer is required to deduct tax from their income if they are making payments to a non-filer. In contrast, a non-filer is subject to higher withholding tax rates on certain transactions, such as the purchase of a new vehicle.
In addition, being a filer in Pakistan can have various benefits, such as easier access to credit facilities, visa applications, and business opportunities. On the other hand, non-filers may face penalties and legal action for non-compliance with tax laws and regulations.
It is essential to note that being a non-filer is not a sustainable approach to managing your taxes in Pakistan. Tax laws and regulations are continuously changing, and non-filers may face difficulties in accessing credit, conducting business, and complying with tax laws in the future. Therefore, it is crucial to become a filer and fulfill your tax obligations to ensure compliance and reap the benefits of being a tax-compliant citizen.
How to Become Filer?
The process of becoming a filer in Pakistan involves the following steps:
Obtain a National Tax Number (NTN): The first step towards becoming a filer is to obtain a National Tax Number (NTN) from the Federal Board of Revenue (FBR). You can obtain an NTN by submitting an application to the FBR along with the required documents, such as a copy of your CNIC, proof of address, and bank account details.
Register for Sales Tax: If you are engaged in taxable activities, such as trading or manufacturing, you must register for a Sales Tax Registration Number (STRN) with the FBR. You can register for STRN by submitting an application along with the required documents, such as proof of business registration, bank account details, and CNIC.
File your tax return: Once you have obtained an NTN and STRN, you must file your tax return with the FBR. The tax return should include details of your income, expenses, tax payments, and deductions. You can file your tax return online through the FBR's web portal or through a tax consultant.
Pay your tax liability: If you have any tax liability, you must pay it to the FBR through a designated bank branch. You can pay your tax liability through an online transfer or by submitting a challan form at the bank.
Renew your filer status: Filing a tax return is an annual requirement, and you must renew your filer status by filing your tax return every year. Failing to file your tax return can result in penalties and legal action by the tax authorities.
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