Tax Returns Surge 45% To 5.77 Million, Payments Fall

Pakistan recorded a sharp rise in income tax return filings, with the total climbing nearly 45% year-on-year to 5.77 million by September 30. Federal Board of Revenue (FBR) data shows that traders, professionals and other non-salaried taxpayers accounted for roughly four-fifths of the overall increase.

FBR figures show that 5,767,384 returns had been submitted by September 30, compared with 3,980,692 during the same period last year, representing an increase of approximately 1.79 million filings.

The number of taxpayers filing returns has expanded significantly in recent years. September-end filings stood at 1.86 million in 2022, 1.92 million in 2023, 3.72 million in 2024, 3.98 million in 2025 and 5.77 million in 2026, meaning the latest total is almost three times the level recorded four years earlier.

Non-salaried taxpayers, including traders, shopkeepers, professionals and self-employed individuals, emerged as the biggest contributor to the growth. Their filings jumped 60% to 3.81 million from 2.38 million a year earlier, adding approximately 1.43 million taxpayers to the filing base.

Five years ago, non-salaried returns numbered around 965,000 and represented about half of all filings. They now make up roughly two-thirds of the total.

Returns submitted by salaried taxpayers increased 22% to 1.9 million, while filings by associations of persons, including partnerships, grew 33% to 53,756.

Despite the substantial expansion in filings, the increase did not translate proportionately into tax payments. Approximately 39% of returns filed this year reported no tax liability, a share broadly similar to the previous year.

Returns reporting income above the taxable threshold rose 37% to almost 2.5 million from 1.82 million. Within this group, filings by non-salaried taxpayers increased 47%, while salaried taxpayers recorded a 32% rise.

The number of payment filers — taxpayers reporting tax payments alongside their returns — increased 38% to 3.35 million. Among non-salaried taxpayers, payment filers climbed by approximately 50% to 1.75 million.

Five years earlier, returns showing income above the taxable threshold stood at around 900,000, while payment filers numbered approximately 1.29 million.

Tax paid alongside individual returns increased 11% to Rs34.5 billion, while payments reported by associations of persons rose 16% to Rs3.7 billion.

Companies, however, moved in the opposite direction. Only 7,953 company returns had been submitted by September 30, compared with 11,206 during the corresponding period last year. Tax payments reported through company returns also dropped to Rs39.1 billion from Rs49 billion.

Consequently, total tax paid with returns fell by roughly 7% to Rs77.3 billion from Rs83.3 billion last year, despite the significant growth in the number of returns submitted.

FBR officials attributed the decline in company filings primarily to timing issues, saying a large number of businesses postponed filing while expecting the government to extend the deadline. The deadline has now been extended, and officials anticipate company filings and related tax payments will rise over the coming weeks.