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Are you ready to take charge of your financial responsibilities in Pakistan? Becoming a filer is a legal requirement and creates economic opportunities and benefits. Whether you’re a salaried individual, a business owner, or a freelancer, filing taxes is essential to contributing to the nation’s economy and ensuring your financial well-being. In this comprehensive guide, we’ll walk you through the process of becoming a filer in Pakistan, step by step.

What are the Benefits of Being a Tax Filer in Pakistan?

Becoming a tax filer in Pakistan have several benefits:

benefits of tax filing

  • Legal Compliance: Filing tax is a legal requirement in Pakistan.
  • Access to Financial Services: Filing your taxes makes you eligible for various financial services like bank loans, credit cards, etc.
  • Improved Trustworthiness: Filing taxes positively impacts your creditworthiness, making it easier to access financial opportunities.
  • Contribution to the Nation: Your taxes play a vital role in the country’s development by funding infrastructure, healthcare, education, and other essential services.

Required Documents and Information

To begin the process of becoming a filer, you’ll need to gather some essential documents and information:

tax filing documents

  • CNIC: Your CNIC is your primary identification document.
  • Cell phone with SIM registered against the individual’s own CNIC
  • Personal email address belonging to the individual
  • Salary Slips (if applicable): Salaried individuals will need their salary slips for income verification.
  • Bank Statements: Bank statements provide evidence of your financial transactions.
  • Property Documents (if applicable): You’ll need relevant documents if you own any property.
  • Business Documents (if applicable): Business owners should gather relevant business documents such as registration certificates, financial statements, etc.

How to Become a Filer?

The National Tax Number (NTN) is a unique identification number issued by the Federal Board of Revenue (FBR) to individuals and businesses for tax purposes. Here’s how you can obtain your NTN:

tax filing

  • Visit FBR’s Online Portal: Go to the official FBR website and navigate the online registration portal.
  • Fill Out the Registration Form: Provide all the required information accurately, including personal details, income sources, etc.
  • Upload Documents: Scan and upload the necessary documents, including your CNIC, salary slips, bank statements, etc.
  • Submit the Application: Review the information provided and submit the registration form.
  • Wait for Approval: Once submitted, your application will be processed, and you’ll receive your NTN once approved.
  • Verify your Eligibility Status: Before filing your tax, it is crucial to understand the eligibility criteria in Pakistan. Taxation applies to individuals with taxable income, as well as to businesses and various entities operating within the country. If you need clarification on your eligibility, consider seeking guidance from a tax professional or refer to the information on the official Federal Board of Revenue (FBR) website.
  • Register for Sales Tax (if applicable): If your business sells goods or services, you may need to register for sales tax. This can also be done through the FBR’s online portal.
  • Maintain Proper Records: Keep accurate records of your income, expenses, and financial transactions. This documentation will be required when filing your tax returns.
  • File Your Tax Returns: Individuals should file their income tax returns annually by the specified due date. Businesses should file their returns based on their specific financial year, which might differ from the calendar year. The due date for businesses is typically December 31st.
  • Pay Any Unpaid Taxes: If you owe any taxes, pay them promptly to avoid penalties and legal complications.
  • Seek Professional Assistance (if necessary): If you find the tax filing process too complex, consider hiring a tax consultant or an accountant to assist you in ensuring accurate and timely tax filing.

What are the Risks of Being a Non-Filer in Pakistan?

Also, being a non-filer is a severe threat and risk that is detrimental to your business. Here’s how:

Risks for Non Tax filer

  • Legal Challenges
  • Loan Application Challenges
  • Reputation at Risk
  • Ineligibility for Government Benefits
  • Restricted Business Opportunities
  • Financial Hardships

Who Should Become a Tax Filer?

In Pakistan, individuals and businesses must file their income tax returns.

For Individuals:

  • You must become a tax filer if you earn an income through salary.
  • If you own a business, you must file income tax returns regardless of size.
  • Whether you’re a freelancer or a self-employed professional, such as a doctor, lawyer, or consultant, you should become a tax filer.If you own property or land, you must also file tax returns.

For Businesses:

  • If you operate a business on your own, you should register your business and become a tax filer.
  • All forms of registered businesses, including partnerships and companies, must file income tax returns.

Conclusion

Becoming a filer in Pakistan is necessary, which every responsible citizen should understand. By fulfilling your tax obligations, you comply with the law, contribute to the country’s development, and unlock various financial benefits. Follow the steps outlined in this guide, stay informed, and take charge of your financial future in Pakistan.