Millennials, it’s time to file your taxes

KARACHI: If you’re in your 20s and currently employed, filing your taxes is not just an obligation, it’s a necessity. In Pakistan, we pretend like there is a decision to be made about taxes: to file or not file. We took the liberty of making it easier to decide by listing the cons of being a non-filer.

Here’s why you should have become a filer, like, yesterday:

1. It’s a known fact that every time you purchase an asset, you have to a pay a certain amount of tax on the transaction. But here’s the kicker: a non-filer pays double the tax. Yup, sucks doesn’t it? If that wasn’t enough, you also pay 0.6% tax on every bank transaction; this includes cash withdrawal.

3. With these activities, your status as a non-filer is registered with the Federal Board of Revenue (FBR), and the really smart people there basically perceive you as the thief that you obviously are.

4. And then there is a series of paying penalties on non-filing and paying penalties on the penalties of the penalties. Wow, that was a tough one to sum up. But it’s tougher to actually be in the situation.

5. The worst of them all, however, is the fact that many countries now require you to submit a record of your tax-returns from at least the previous three years, even if you are applying for a visit visa. Failing to comply with this requirement can lead them to not consider your request for a visa altogether.

6. But generally there’s this disdain you’ll experience from all public faucets of society. Since National Tax Number (NTN) holders have separate queues at airports and elsewhere, you are shamed and humiliated like that phupi ka beta who picks his nose and doesn’t pitch in to buy candy.

7. And the worst thing is, as per the Federal Board of Revenue (FBR) criteria, if you’re earning less than Rs400,000 annually then you’re not legally required to become a filer but you still suffer from the aforementioned burden.

Following are the steps you can follow to become a filer as of December 2017:

1. First and foremost get an NTN.

2. There are two kinds of people in the world: one who are salaried and the other who give them salaries. Well, breaking news. You both have to register for NTN for if you don’t, your money becomes black money. So, to facilitate all of us, FBR has gone digital. You don’t even have to go to the office anymore. Log on to the FBR website.

3. Go to the registration for NTN tab and input the information. For salaried individuals (scanned copy of CNIC, email address, mobile number, name of employer and NTN of employer), for people rich enough to own organisations (scanned copy of CNIC, letterhead, copy of a utility bill, email address, phone number).

4. With this information entered, you will receive a code on your phone and a different one on your email address. Enter both when asked.

5. Your id and password will be generated, either immediately or within two days, which you can use to log into the portal and manage your life – I mean taxes.

OK since it’s your lucky day, we’ll tell you two advantages of becoming an NTN holder

1. If you have to make transactions of more than Rs50,000 (you are classified as rich) but also you have to pay 0.3% tax on the amount above the limit instead of 0.6%.

2. Also, if your tax for the year is let’s say Rs35,000, and throughout the year you have paid taxes on different transactions which amounted to let’s say Rs30,000, you can always reclaim it by submitting the receipts for all your transactions conducted throughout the year and only pay the remaining Rs5,000.

Additional reporting by Mehak Zehra.

 

This article is part of a series on ‘how to’. Read the previous article on this series here.