In this blog post, we’ll discuss what it means to be a filer, why it’s important to become one, and how to become a filer in Pakistan. Pakistan has one of the lowest tax-to-GDP ratios in the world. According to the World Bank, only about 1% of Pakistan’s population pays income tax. However, the government of Pakistan is taking steps to increase the tax base and encourage more people to become taxpayers. One way to do that is by becoming a filer.

What is a Filer?

A filer is a person who files their income tax return with the Federal Board of Revenue (FBR) in Pakistan. Filing a tax return means submitting a document to the FBR that shows how much income you earned during a particular year and how much tax you paid on that income. Filing a tax return is required by law if you meet certain income thresholds.

Why is it important to become a Filer?

There are several reasons why it’s important to become a filer in Pakistan. First and foremost, it’s your duty as a citizen to pay taxes. Taxes are what fund public services like roads, schools, and hospitals. By paying your fair share of taxes, you’re contributing to the development of your country.

Secondly, becoming a filer can have financial benefits. For example, if you’re a salaried employee, becoming a filer can help you claim tax refunds for overpaid taxes. Additionally, some financial institutions may require you to be a filer before they approve loans or credit cards.

Finally, becoming a filer can help you avoid penalties and legal issues. If you’re required to file a tax return but fail to do so, you could face penalties, fines, and legal action. By becoming a filer, you can avoid these consequences and ensure that you’re compliant with the law.

How to Become a Filer in Pakistan?

Becoming a filer in Pakistan is a straightforward process. Here are the steps you need to follow:

Step 1: Get a National Tax Number (NTN)

The first step to becoming a filer is to get a National Tax Number (NTN). The NTN is a unique 7-digit number that identifies you as a taxpayer in Pakistan. You can get an NTN by visiting the FBR’s website and filling out the online registration form. You’ll need to provide your personal information, including your name, address, and CNIC (Computerized National Identity Card) number.

Step 2: Register for a Sales Tax Number (STN) (If Applicable)

If you’re a business owner or self-employed, you’ll also need to register for a Sales Tax Number (STN) in addition to your NTN. The STN is a 13-digit number that identifies you as a sales tax registrant in Pakistan. You can register for an STN by visiting the FBR’s website and filling out the online registration form. You’ll need to provide your personal and business information, including your business name, address, and type of business.

Step 3: File Your Income Tax Return

Once you have your NTN and STN (if applicable), you’ll need to file your income tax return. The income tax return is a document that shows your income and tax paid during the previous tax year. You can file your income tax return by visiting FBR’s website and filling out the online form. You’ll need to provide your personal information, including your name, address, and NTN. You’ll also need to provide information about your income and tax paid during the previous tax year.

Step 4: Pay Your Taxes

After you’ve filed your income tax return, you’ll need to pay any taxes owed. You can pay your taxes through a variety of methods, including online banking, ATM, or by visiting a National Bank of Pakistan (NBP) branch. You’ll need to provide your NTN and the amount of tax you owe.

Step 5: Keep Your Records

It’s important to keep accurate records of your income and expenses. This will help you file your tax return accurately and avoid any penalties or legal issues. Make sure to keep receipts, invoices, and any other relevant documents.

Step 6: Renew Your Filer Status

Once you’ve become a filer, you’ll need to renew your filer status every year. This involves filing your income tax return and paying any taxes owed for the previous tax year. You’ll need to renew your filer status by the end of September each year.

Tips for Becoming a Filer

Here are a few tips to help you become a filer in Pakistan:

1. Keep Accurate Records: As mentioned earlier, it’s important to keep accurate records of your income and expenses. This will help you file your tax return accurately and avoid any penalties or legal issues.
2. Consult a Tax Expert: If you’re unsure about any aspect of the tax filing process, it’s a good idea to consult a tax expert. They can guide you through the process and help you file your tax return accurately.
3. File Your Tax Return on Time: Make sure to file your tax return on time to avoid penalties and legal issues. The deadline for filing your tax return is usually September 30th each year.
4. Pay Your Taxes on Time: Similarly, make sure to pay your taxes on time to avoid penalties and legal issues. If you’re unable to pay your taxes in full, you may be able to set up a payment plan with the FBR.

Conclusion

Becoming a filer in Pakistan is an important step towards contributing to the development of your country and avoiding penalties and legal issues. By following the steps outlined in this blog post, you can become a filer and enjoy the financial benefits that come with it. Remember to keep accurate records, consult a tax expert if needed, file your tax return on time, and pay your taxes on time.