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Election candidates paid 20% more taxes in 2017 than 2016

Election candidates paid 20% more taxes in 2017 than 2016

ISLAMABAD: The candidates, who are participating in the general elections 2018, paid over 20 per cent more taxes in fiscal year 2017 than 2016.

Tax payments reported by the Federal Board of Revenue (FBR) and provided by the ECP reveal the tax payment history for a total of 15,911 candidates. There are more listed for the incoming election, but not all had their tax payment records reported.

The average tax paid by these candidates in 2016 was roughly Rs170,000 while it rose to Rs209,000 in 2017.

While the growth in average taxes paid was only 4% from 2015 to 2016, the increase jumped to 23% in 2017. Furthermore, the percentage of candidates paying tax also increased.

This indicates that not only is tax coverage increasing, but candidates are, on average reporting, paying more tax over time. It could be that the massive growth in assets reported between 2016 and 2017 is due to increased income earned from genuine business interests, political rent seeking or more nefarious means.

However, due to the very high increase in tax payments, we believe it has to be partly, if not mostly, due to increased accuracy of income and asset reporting as well as an increased willingness to pay taxes by politically active individuals.