Top Reasons Why You Should Be On FBR’s Active Taxpayers List (ATL)

Top Reasons Why You Should Be On FBR’s Active Taxpayers List (ATL)

In spite of the fact that Pakistan is home to millions of working and business professionals, the country’s tax-to-GDP ratio is uncommonly low. The biggest reason why people do not file their taxes is a lack of awareness, especially regarding the benefits of being a tax filer. 
It is more than just a moral and rightful duty to pay your taxes, it is also a gateway to an improved living standard because individuals directly fund the state’s economy. 
Serious efforts like penalizing non-filers of tax returns and provision of benefits to tax filers in Pakistan are being taken by the government of Pakistan and the Federal Board of Revenue (FBR) to bring more and more people into the tax net. 

An initiative taken by the FBR to encourage an increase in tax filers was the introduction of the Active Taxpayers List (ATL). After making filing of tax returns for salaried and business individuals mandatory, FBR Pakistan has started sending letters to people in which they have been directed to register for the National Tax Number (NTN) and get their names included in the ATL through their allotted NTN. 
After getting your name included in ATL, you will get the privilege of paying lower taxes than the non-filers on financial transactions including different types of bank transactions, sale/purchase of property and vehicle, etc. 

15 REASONS WHY YOU SHOULD BE A TAX FILER IN PAKISTAN

1.    Lower Withholding Tax
If you are on the ATL, you have the luxury of bearing almost half of the withholding tax as compared to inactive taxpayers. For instance, a 5% tax on import of Raw Material is payable by persons appearing on ATL, whereas 11% is payable by inactive taxpayers.
2.    Lower Tax On Commercial Imports
Persons appearing on the ATL are liable to pay 6% on commercial imports, whereas inactive taxpayers are required to pay 12%.
3.    Lower Tax On Dividend
Persons appearing on ATL have to pay a 15% tax on dividends, whereas inactive taxpayers have to pay 30%.
4.    Lower Tax on Bank and Saving Schemes
Persons appearing on ATL have to pay a 10% tax on profit from bank and saving schemes up to Rs. 500,000/-, and 15% above Rs. 500,000/-. Inactive taxpayers have to pay double.
5.    Lower Tax on Sale of Goods
5% tax shall be withheld on the sale of goods by the person appearing on ATL except companies, whereas 9% shall be withheld from inactive taxpayers.
6.    Lower Tax on Provision of Services
10% tax shall be withheld on the provision of services by the person appearing on ATL except for companies, whereas 20% shall be withheld from inactive taxpayers.
7.    Lower Tax on Execution of Contracts
7% tax shall be withheld on the execution of contracts by the person appearing on ATL except for companies, whereas 14% shall be withheld from inactive taxpayers.
8.    Lower Tax on Prize Money
Persons appearing on ATL have to pay a 15% tax on prize money of prize bonds, whereas inactive taxpayers have to pay 30%.
9.    Lower Tax on Commission Payable
10-12% tax on commission payable by persons appearing on ATL, whereas 20-24% is payable by inactive taxpayers.
10.    Lower Annual Token Fee for a Vehicle
Persons appearing on the ATL have to pay the Annual token fee for a vehicle from Rs. 800/- to Rs. 10,000/-, whereas an inactive taxpayer has to pay from Rs. 1600/- to Rs. 20,000/-.
11.         Lower Tax on Vehicle Registration
RS. 7,500/- to Rs. 250,000/- tax shall be withheld on vehicle registration from the person appearing on ATL, whereas Rs. 15,000/- to Rs. 500,000/- shall be withheld from inactive taxpayers.
12.         Lower Tax on Purchase of Property:
2% tax payable on the purchase of property by the person appearing on ATL, whereas 7% tax payable on the purchase of property by inactive taxpayers.
13.          Lower Tax on Sale by Auction:
10% tax payable on sale by auction by the person appearing on ATL, whereas 20% tax payable on inactive taxpayers.
14.         Lower Tax on Payment Against Advertisement to Non-Resident Persons:
3% tax deduction for payment against advertisement to non-resident persons by the person appearing on ATL, whereas 6% tax deduction from inactive taxpayers.
15.          Increase in Creditworthiness:
Inclusion in the ATL increases the creditworthiness of an individual or entity, which is beneficial when seeking loans or credit facilities from banks or financial institutions.
 

In summary, being on the Active Taxpayer List (ATL) or being a filer can bring substantial financial advantages to individuals and businesses in Pakistan. These benefits encompass lower tax rates on different transactions, reduced withholding taxes, and decreased token fees for vehicle registration. It's crucial to note that maintaining ATL status necessitates timely filing of income tax returns, as failure to do so may lead to surcharges and exclusion from the list. Therefore, taxpayers in Pakistan should ensure punctual submission of their income tax returns to fully leverage the benefits associated with being on the ATL.