The Federal Board of Revenue has disclosed that almost 12 million people in Pakistan filed income tax returns for one reason only — to buy a property or a vehicle. The figure, reported by Business Recorder on 5 November, lays bare how much of Pakistan’s supposedly widening tax base is made up of people who file once, get the filer status they need for a single transaction, and then never file again.
Only 7.5 million file every year
Of the roughly 12 million people on the register for this reason, only about 7.5 million keep filing year after year, despite notices from the FBR. The gap — around four and a half million people — is the difference between the headline filer count and the number of Pakistanis who actually stay in the tax system.
The latest filing cycle tells the same story. The FBR had received 7.6 million income tax returns by the 31 October deadline for Tax Year 2026, after the deadline was extended twice — from 30 September to 15 October, and then to 31 October. The board has said there will be no further extension, and it issued the Active Taxpayers List for 2026 on 2 November.
Why millions file once and never again
The reason is the filer discount on big transactions. Buying or selling property, or registering a vehicle, costs far less in withholding tax for a filer than for a non-filer — so a single return, filed once, can save a family a large sum on one deal.
The gap is widest on property. Under sections 236K for the buyer and 236C for the seller, advance tax is collected at the time of the deal. Published tax guides for Tax Year 2026-27 put the buyer’s advance tax at 1.25 percent for filers, against 10.5 percent or more for non-filers, and the seller’s at 2.75 percent against 11.5 percent. On a home worth tens of millions of rupees, that difference runs into hundreds of thousands of rupees — which is why millions of people file a return, complete the deal, and then stop.
Many of them have no taxable income to declare in the first place. They are not salary earners or business owners dodging tax; they are people buying a house or a car who must hold filer status to keep the transaction affordable. The return is a ticket to the deal, not a record of income.
What the FBR is considering
The FBR is now considering system changes to remove the filing requirement for people who have no taxable income, according to the disclosure. The aim is to clean up the register: a tax roll that counts 12 million filers overstates the real tax base and makes compliance look far better than it is.
Stripping one-time property and vehicle buyers out of the return system would leave a smaller but more honest count of regular filers — and spare millions of people with no income tax to pay from filing a return they do not need. The board has not said when any change would take effect, and no decision has been announced.
The wider picture: a Rs129 billion shortfall
The disclosure comes as the FBR’s own numbers show the strain. In the first four months of the current fiscal year, from July to October, the board collected Rs4,088.2 billion against a target of Rs4,217.2 billion — a shortfall of about Rs129 billion. Growth so far is about 7 percent, against the 17 percent needed to reach the annual target of Rs15,264 billion by 30 June 2027.
The retailers’ fixed tax scheme has fared worse. Only 1,750 retailers have availed it, just 220 of them fresh filers, out of an estimated 3.6 million potential non-filers in the retail sector. The scheme was meant to raise Rs50 billion. The FBR has said it plans to identify retailers through geo-tagging of markets in major cities.
For the millions of one-time filers, the practical question is whether the filing requirement for property and vehicle deals is eased — and what replaces it. If the FBR drops the requirement, buying a home or a car would no longer force a return out of someone with no taxable income. If it keeps it, the register will go on counting people who file once and disappear. Either way, the 12 million figure is a reminder that Pakistan’s tax problem is not only about how many people file — it is about how many keep filing, and how many actually pay.
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