The Pakistani government is introducing stricter measures to target non-filers and expand the country’s tax base. The Tax Law Amendment Bill 2024-25 includes significant changes designed to curb tax evasion and enhance accountability. Among these measures, non-filers will face a ban on purchasing vehicles with engine capacities exceeding 800cc.
Key Amendments in the Tax Law
The proposed amendments aim to tighten restrictions on non-filers and unregistered businesses. Some of the significant provisions include:
1. Vehicle Purchase Ban
Non-filers will no longer be allowed to purchase vehicles with engine capacities over 800cc. This move aims to discourage tax evasion and bring more individuals into the tax net.
2. Restrictions on Property and Shares
Non-filers will also be barred from acquiring properties or purchasing shares above a specified limit. This measure is intended to curb major financial transactions conducted outside the tax system.
3. Banking and Business Penalties
- Bank accounts of unregistered businesses will be frozen.
- Property transfers by unregistered individuals engaged in business activities will be prohibited.
- The government will have the authority to seize properties owned by non-filers.
4. Sales Tax Compliance
Businesses failing to register for sales tax will face penalties, including frozen accounts and restricted property transactions.
5. Tax Filing Benefits for Families
Immediate family members of filers, including parents, spouses, and children under 25 years of age, will be considered filers for tax purposes.
Federal Board of Revenue’s Role
The Federal Board of Revenue (FBR) will compile and share a comprehensive list of non-filers. Bank accounts of individuals on this list will be frozen, effectively limiting their ability to conduct financial transactions.
Implementation Timeline
The proposed measures will come into effect following an official notification by the federal government. These amendments signal a significant step toward improving tax compliance and addressing the country’s low tax-to-GDP ratio.
Impact on Pakistan’s Tax System
This move is expected to expand the tax base by compelling individuals and businesses to register with tax authorities. By targeting major financial transactions, the government aims to ensure greater accountability and reduce tax evasion across various sectors.
