Top 500 companies paid Rs 364.325 billion tax during 2016-17 and out of 79,728 companies included in Tax Directory 2016-17, 32,943 paid nil tax and 22,312 paid less than Rs 1 million tax, revealed taxpayers directory ''Between the Lines'', released by Sustainable Development Policy Institute (SDPI). The comprehensive analysis of tax directory 2016-17 was done by Shoaib Nizami while Mohsin Kazmi and Arsalan Channa, co-authors, revealed data at the launch of taxpayers directory ''Between the Lines'', here Friday.

Data analysis showed that leading 500 companies paid Rs 364.325 billion tax during 2016-17, reflecting an increase of 30 percent when compared with previous fiscal year. The analysis strongly recommended joint efforts of the Securities and Exchange Commission of Pakistan (SECP) and FBR to increase number of tax returns, particularly in corporate sector.

This document is part of series of publications published earlier providing insight into the tax revenues collected by Federal Board of Revenue (FBR). In continuation, this report analyzes the trends and changes that occurred during the fiscal year 2016-17 as recorded in the directory maintained by FBR. The report provides changing trends in tax payments within sectors and across sectors. For enhanced understanding, diagrammatic representation of statistics is done.

Shoaib Nizami presented the details of tax payers by his presentation and highlighted that the study had scrutinized 79,728 companies and associations registered in the Federal Board of with both FBR and SECP. It was emerged that as gross total, Rs 484 billion in tax were collected according to tax returns filed in June 2015 to July 2016. It was emerged by the finding that 66 companies and associations paid tax of over one billion rupees contributing a total of Rs 231 billion.

In comparison to previous record of the highest paying entities, this number of 66 is higher than 46 recorded in fiscal year 2013-14 which totaled at Rs 192 billion. During this period Rs 735 billion were collected as direct tax, Rs 344.688 were collected as total income tax, total registered entities with SECP remained 61, 989, total registered entities with FBR were 64, 545 and companies that paid taxes were 37,939.

The author of the tax directory said that the analysis of filed tax returns has shown a very interesting trend. The banking sector grew rapidly while the energy sector''s contribution lessened and construction sector showed average performance. Public energy giants such as OGDCL and others paid just Rs 5 billion tax in fiscal year 2016-17 compared to previous payment of Rs 36 billion in fiscal year 2013-14.

In just 4 years this steep shrink in tax is paramount not only in numbers but is also of grave concern. Also, PPL, Attock Petroleum, Shell, Ceyron and Mari Petroleum''s tax amount also shrank. Shoaib Nizami said that as a way forward, the indicators were underpinning the need for SECP and FBR to join hands to increase tax returns. Besides One Stop Shop of SECP and FBR, EOBI needs to further strengthen the system and SECP''s form 23 and 29 information should be shared with FBR with companies'' directors and bank accounts. Online return submission should be made easy and user friendly, trust deficit of FBR needs to be removed and withholding tax collection should be reduced, he concluded.

The rise in collection of revenue as direct taxes was a positive sign for national economy as trend suggested in the year 2016-17. However, the flip side of this fact did not seem that promising as volume of indirect taxes has shown an increase with similar ratio.

The study scrutinized 79,728 companies and associations registered in the Federal Board of Revenue and Securities and Exchange Commission of Pakistan. As gross total, Rs 484 billion in tax were collected according to tax returns filed in June 2015 to July 2016. In order to see which entities have paid the highest tax, the lowest and in-between, this study has categorised these 79,728 entities into six quantified categories: companies and associations having paid tax of Rs 1 billion or more; those who paid Rs 100 million or more; those who paid Rs 1 million and those who paid less than Rs 1 million and lastly those who did not pay tax at all.

In summary, the report''s broad findings show that 66 companies and associations paid tax of over one billion rupees contributing a total of Rs 231 billion. In comparison to previous record of the highest paying entities, this number of 66 is higher than 46 recorded in FY 2013-14 which totaled at Rs 192 billion.

Copyright Business Recorder, 2017