Monthly Economic Affairs, Vol. III, No. IV
Published Date: Jun 16, 2014
Govt. companies take lead in paying tax during 2012-13: SDPI
Islamabad-based think tank Sustainable Development Policy Institute (SDPI) revealed that the government sector companies were the highest tax payers in the Fiscal Year 2012-13 which was very encouraging and an example set for others, Dr. Abid Suleri, Executive Director, SDPI said while addressing a media briefing. He said that the SDPI examined the FBR tax directory and concluded that out of total direct taxes Rs 739 billion collected in FY 2012-13, Rs 344.67 billion or 47 % of the total income tax was deducted from at source as this tax was paid by the registered business enterprises. He apprised the media that the FBR collected Rs 395.01 billion or 53% from individuals or non-registered entities. A total of 26,600 or 41 per cent of all registered businesses,
either companies or Associations of Persons (AOPs) paid zero tax to FBR. AOPs are registered in the provinces under the Partnership Act of 1932 with provincial governments whereas companies are registered with the Securities and Exchange Commission of Pakistan (SECP) under Companies Ordinance 1984. Giving details, Suleri said, the state run OGDCL was the largest tax payer company with total tax payment of Rs 36.96 billion, followed by Pakistan Petroleum, which paid a tax of Rs 15.40 billion. Other large tax payer company was Habib Bank Limited (HBL) with a tax payment of Rs 11.78 billion he said adding that the Government Holdings Company paid Rs. 10.75 billion, Fauji Fertilizer Rs 9.90 billion, Muslim Commercial Bank, PSO, UBL, Pak Arab Refinery, Kotadu Power, BHP Petroleum, ABL, Bank Al Habib, PTA, Pakistan Oil Field, Unilever are also part of billions tax payer club, he added. According to available data, by June 30, 2013, a total of 61,989 companies were registered with the SECP, whereas, only 23,845 or 38 % registered companies filed tax returns with the FBR, he argued. Analysis
shows that only 13,206 companies (21 per cent) paid income tax in the tax year 2012-13, meaning that 62 per cent (38,144 companies) of the companies registered by the SECP were non-tax compliant. As many as 10,639 corporate taxpayers have paid no taxes to the income tax department in the year 2013. Though these companies filed tax returns, but they paid zero taxes. However, it is important to note that the tax contribution of the 21 per cent of registered companies who did pay their taxes was Rs315.85 billion or 43 per cent of the total direct tax collection for the year 2012-13. The state’s own enterprises were revealed to be the highest tax payers. Oil and Gas Development Company (OGDCL) was the largest taxpayer with a total payment of Rs36.96 billion, followed by Pakistan Petroleum, which paid taxes worth Rs15.40 billion. Other large taxpayers included Habib Bank Limited (HBL) with Rs11.78 billion, the Government Holdings Company with Rs 10.75 billion and Fauji Fertilizer with Rs9.90 billion.
Muslim Commercial Bank, Pakistan State Oil, United Bank Limited, Pak-Arab Refinery, ENI, Kot Addu Power, BHP Petroleum, Allied Bank, Bank
Al-Habib, Pakistan Telecommunication Authority, Pakistan Oil Fields and
Unilever were among 45 companies paid taxes in excess of one billion rupees and their tax contribution amounted to Rs192.78 billion. Thirty-four companies paid between Rs 500 million and Rs1 billion in taxes and their tax contribution added up to Rs22.854 billion. Another 242 mid-category companies paid taxes between Rs 100 million and Rs500 million, with a total tax contribution of Rs51.509 billion. Consequently, out of the FBR’s total direct tax collection, Rs267.24 billion was contributed by only 321 companies. According to available estimates, the total figure of registered AOPs countrywide is 124,000. Of the total, only 40,700 or 33 per cent filed tax returns and among these 15,961 AOPs paid zero rupees in tax, while six filed returns in the negative. Only 24,733 or 20 per cent of the AOPs paid any amount of money as tax and the total tax contribution of AOPs stood at Rs 28.83 billion, 4 per cent of total tax revenue.