According to media reports the number of tax filers for FY18 is 2.34 million – the highest figure ever. But that number alone should not be a reason to cheer.

In absolute terms, total number of new filers will also be highest ever – 611,540 new filers in FY18, compared to 590,989 in FY17. But in percentage terms, growth has actually fallen to 35 percent in FY18 compared to a growth of 52 percent in FY17.

Media also reports that filers for FY19, provisional numbers of which are expected to be reported by December 2019, will land at around 4 million. This will be touted as a milestone, if indeed that expectation becomes a reality – because that would be about 71 percent growth over 2.34 million filers reported for FY18.

But on standalone basis, that too won’t be a reason to cheer, since as yet there is no kind of irrefutable evidence to show that growth in filers over the last few years has in fact led to material growth in tax collection.

BR Research’s analyses of tax directories FY13 to FY17 shows that nearly 50 percent of the increase in filers in FY17 came from those who filed zero returns or returns of less than Rs1000 (the directory for FY18 hasn’t been released yet). This number was 25 percent and 9 percent in the immediately two preceding years respectively. If the growth in filers in FY18 is similar to what was observed in FY17, then it’s not really a reason to cheer. One could, of course, argue that at least a greater number of people are in the system – the so-called tax net. But whether or not those people who are now in the system, many of whom filed the return only to avoid the penalty of being a non-filer, are being graduated to proper taxpaying filers? Or is it so, and it is surely in the realm of possibilities, that a majority of those who filed zero returns or returns of less-than-1000-rupees are in fact presenting a true reflection of their incomes and expenditures to the tax body?

The FBR hasn’t ever reported such analyses publicly; nor do policy wonks who work closely with government have any knowledge of its existence. It’s about time for FBR to start reporting policy relevant data and insights gleaned from those analytics, to substantiate its tax collection claims, and to facilitate the debate over tax policy and administration. Various type of datasets, including those demanded by the IMF for its periodic monitoring and reporting requirements under the programme, should be disseminated to the public via FBR’s website on monthly basis as does the central bank (in user friendly format) for datasets relevant to its domain.

In fact, the FBR should also take note from the central bank’s latest decision (announced yesterday) to disclose significant enforcement actions through its website to increase transparency and strengthen market discipline in so far as the imposition of monetary penalties and other actions against violations of laws, rules, regulations, guidelines or directives.