May 22, 2022

Data Story of the Day: The Express Tribune Reports on Pakistan’s Shrinking Tax Return Filings

It’s no hidden fact that Pakistan’s salaried class, with its automatic deduction of monthly income taxes, most actively files income tax returns.

But the increasing gap between Pakistani tax filers who are salaried and those who work in other sectors really becomes evident in our data story of the day, The Express Tribune’s From tax year 2013 to 2017: Except for salaried class, number of tax return filers shrinks.”

An embarrassing trend

With the help of data submitted by the Federal Board of Revenue (FBR) to a senate committee, the Tribune story shows that the number of tax return filers in all except two economic sectors decreased in 2017 compared to 2013.

Some of the numbers are abysmal:

• Industries such as cement, fertiliser, banking, sugar, power and hotels had fewer than 500 income tax return filers in 2017

• The number of return filers in the textile industry dropped by nearly 20% between 2013 and 2017

• The total number of tax filers in 2017 decreased by just over 150,000 compared to 2016

The data suggests that most sectors of the local economy are not reporting their income to the government. Attempts by the government to bring the business sector within the tax net also seem to be struggling for success, according to the story.

Silver lining?

Perhaps the only encouraging fact is the number of salaried people who filed their income tax returns to FBR in 2017 increased by 80% compared to 2013.

(The story shows this increase as “a net addition of 232,368 or 96%” but we’re not sure how this figure was calculated.)

This increase in salaried return filers might be due to general incentives that might be more attractive to the middle-income salaried class, for example, filers get a motor vehicle tax subsidy. Anyway, the story does not mention the reasons for the increase or decrease in the number of filers.

The “others” category of tax return filers also saw a 19% increase between 2013 and 2017. The story, however, does not mention which kinds of economic activity fall under the “others” category.

What do we do with so many numbers?

Err, not type each number separately.

In paragraph after paragraph, the story tediously mentions the 2013 and 2017 numbers of tax filers for each different industry in the FBR data. We counted 30 industries mentioned in the article, 28 of which were listed in alphabetical order.

Perhaps because this was a daily news story, there might not have been enough time to create a meaningful illustration to go with the text. The Tribune usually comes up with excellent illustrations and graphics. The print and web versions of this story, however, carried a stack of seven boxes with important highlights from the data. We couldn’t tell if there was any logic to the size or arrangement of each box.

A follow-up article to explain some of the unanswered questions, such as what’s the “others” category or why is there a decrease over five years despite economic expansion, could also provide an opportunity to improve the quality of data presentation.

Follow our Data Story of the Day tag to read more data-driven articles from the Pakistani press.

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