Political parties: Open your books

Summary

• In “Laxity in tax compliance”, published on January 22, 2017, the warning was explicit: “Political parties also do not file tax returns which they should under the Income Tax Ordinance, 2001.” In “FBR and tax-defiant political parties”, published on March 21, 2021, the reported position for tax year 2020 was that only two parties had filed returns, against 27 registered with FBR and 127 with the ECP.[2][3] That later article recorded the absence of Pakistan Tehreek-i-Insaf (PTI), Pakistan Muslim League (Nawaz)—PML-N and Pakistan Peoples Party (PPP) from the Active Taxpayers List checked on March 19, 2021.
• ECP registration alone does not establish approved NPO status under section 2(36) of the Income Tax Ordinance, 2001.
• Relief from tax must not be confused with relief from accountability.[7] FBR should reconcile the ECP register with tax registration and filing records, determine each party’s legal position, and pursue established defaults under section 114(4) of the Income Tax Ordinance, 2001, with applicable penalties and due process.

AI Generated Summary

Pakistan’s political parties while in Parliament, federal of provincial or Senate, demand obedience to laws they enact, taxes/fees they impose and institutions they control. Their own financial accountability deserves an equally uncompromising test. Who finances them? Have they submitted the required accounts and income tax returns? Have regulators reconciled those disclosures? Democracy becomes an unequal bargain when citizens must explain their livelihoods while organisations seeking state power resist explaining their money.

Article 17(3) of the Constitution is unambiguous: “Every political party shall account for the source of its funds in accordance with law.” Read alongside Article 19A, this obligation supports citizens’ demand to know whose money sustains political competition. It binds parties in government and opposition alike. However, the constitutional command must be distinguished from the particular filing duties created by electoral and tax legislation.^[1]

This concern is longstanding. In “Laxity in tax compliance”, published on January 22, 2017, the warning was explicit: “Political parties also do not file tax returns which they should under the Income Tax Ordinance, 2001.” In “FBR and tax-defiant political parties”, published on March 21, 2021, the reported position for tax year 2020 was that only two parties had filed returns, against 27 registered with FBR and 127 with the ECP.^[2][3]

That later article recorded the absence of Pakistan Tehreek-i-Insaf (PTI), Pakistan Muslim League (Nawaz)—PML-N and Pakistan Peoples Party (PPP) from the Active Taxpayers List checked on March 19, 2021. Those findings demand a documented follow-up. They cannot honestly be recycled as a verified assessment of every party’s present status. Neither an old ATL snapshot nor missing information on a website establishes current non-filing. FBR should explain what enforcement followed and provide a lawful, verifiable account of subsequent compliance.

The Elections Act, 2017 supplies concrete obligations. Section 210 requires audited consolidated accounts within sixty days of the financial year’s close, stating income, expenditure, funding sources, assets and liabilities. ‘Form D’ must accompany the auditor’s report and an authorised office-bearer’s certification of financial accuracy and absence of prohibited funding.

Rule 159 reinforces these requirements. For fiscal year 2025–26, the Election Commission of Pakistan (ECP) expressly fixed August 29, 2026 as the deadline and required copies of bank statements.^[4] Till October 11, 2026 at the time of writing these lines, ECP did not disclose the number of defaulting parties.

Section 204 requires contributions to be recorded and prohibits funding from specified foreign sources, while recognising the statutory exception for overseas Pakistanis holding NICOP. Rule 160 provides confiscation proceedings, with notice and a hearing. Section 211 and Rule 161 separately address campaign expenditure and contributors donating at least Rs1 million. Section 215 connects compliance with section 210 to eligibility for an election symbol, subject to notice and an opportunity to be heard.^[5]