Over 100 MPs not paying income tax

ISLAMABAD: More than 100 members of parliament are either not paying income tax or are not registered with the Federal Board of Revenue (FBR).

As many as 161 of 1,170 MPs have not paid tax on their income nor have filed any tax returns. These MPs are in violation of tax laws while collectively owning assets worth Rs35 billion. Official records show that some are not even registered with the tax authorities.

Official documents examined by Geo News have disclosed that more than 103 MPs have collective assets of Rs8 billion but are not active taxpayers. A few dozen are not even registered with the FBR as taxpayers.

As many as 76 of these 103 MPs represent major political parties; two are ministers in Prime Minister Imran Khan’s cabinet. Official records show that these MPs are in the ‘in-active taxpayers’ list’. Four MPs, who are not active taxpayers, have purchased properties collectively worth millions of dollars in Dubai, Norway and London in the last decade. Around a dozen among them have had declared businesses namely construction companies, petrol pumps, etc. in the country.

The Parliamentarians Tax Directory for the fiscal year 2018 did not carry a tax record of around 323 of the total 1,170 MPs. As many as 847 MPs collectively paid around Rs1.6 billion in taxes for the year 2018-19, according to the FBR directory. The directory carries tax credentials of total 1,008 MPs, while tax columns of 161 MPs have been left blank and somenames were missing from this important official document.

The federal government has yet to release MPs’ Tax Directory for the years 2019-2020 and 2020-2021. These revelations have come at a time when tax authorities have launched a campaign to enhance the tax net, urging citizens to share information about assets held in Pakistan or abroad.

More than 30 female MPs have financial assets mostly attached with their millionaire husbands. They are not filers and are not even registered as tax payers with the FBR. Nearly three dozen MPs have assets worth over Rs100 million each. As many as 12 MPs own assets of over Rs500 million each presently. But these MPs are not active taxpayers.

Under tax laws, they are required to file their returns and get registered with the FBR. This list includes MPs from the PTI, PMLN, PPP, MQM, JWP, BAP, ANP, JI, JUI-F, JUI-F Nazriati, MMA, Pk-MAP, BNP and independent MPs.

Tax experts say that the amount of tax on income utilised to create those assets estimated at Rs8 billion must be in multiple millions. They believe taxes between Rs800 million and Rs1 billion could be generated by the authorities for the past three years.

Tax evaluation suggested that if an individual earning annual taxable income of more than Rs40,000 (Rs600,000 in case of salaried individuals) is supposed to file return of income under Section 114, read with First Schedule of Income Tax Ordinance, 2001.

Non-filing of return and wealth statement is a violation of Sections 114 and 116. Section 114 also stipulates obligation for filing of return for various other criteria, even if an individual owns an immovable property of 500 SQY or a motor vehicle with an engine capacity above 1000CC amongst others.

It seems the FBR has turned a blind eye to the tax evasion by MPs. Despite repeated requests for their comments from Geo News, the FBR has chosen to remain silent on the issue. This correspondent made repeated requests via emails, WhatsApp and text messages to the FBR spokesperson who said: “We are barred by confidentiality laws.”

When asked why there were no tax details of a quarter of the entire number of MPs, the spokesperson said: “There can be any reason for which case of every individual will have to be checked, which is not called for.”

The FBR also did not entertain multiple requests filed under RTI laws by this correspondent and did not respond to the Pakistan Information Commission’s order. Ashfaq Tola, a tax expert, said: “The Income Tax Ordinance mentions punishment of MPs who are not registered with FBR; it has to proceed against these MPs for not being registered and being filers.” Tax authorities could put such MPs on notice under Section 111 of Income Tax Ordinance, Tola said.