| Islamabad: The Federal Board of Revenue (FBR) is implementing significant new regulations affecting high-income taxpayers and non-filers, as reported by a news source on September 22. These steps have been taken to enhance tax compliance and streamline financial transactions.
Read: FBR requires taxpayers to fulfill 14-point checklist
Under the latest measures, annual cash withdrawals for high-income tax filers will be capped at PKR 30 million. Individuals earning over PKR 10 million annually will be required to provide proof of income when purchasing property, though they will still retain the ability to buy vehicles. Taxpayers earning less than PKR 10 million will need to justify their income before making significant purchases, such as real estate, vehicles, or investments in securities and mutual funds.
In addition, a comprehensive plan approved by Prime Minister Shehbaz Sharif will impose restrictions on non-filers of tax returns. These individuals will be barred from engaging in banking and financial transactions, including the acquisition of cars, property, and other financial instruments. The only exception will be basic banking accounts, such as the Asaan Account.
The FBR’s strategy includes freezing bank accounts for unregistered manufacturers and wholesalers with turnovers exceeding PKR 250 million, along with imposing penalties of PKR 1 million. Retailers with annual turnovers above PKR 100 million will face similar restrictions. Currently, only 14% of manufacturers are registered for sales tax, leaving a significant number of wholesalers and retailers operating outside the tax net.
To tackle this issue, the FBR plans to implement digital invoicing and issue notices to unregistered entities. Non-compliance will result in severe penalties, including freezing bank accounts and restricting utility services. The initiative also seeks to reduce the overall circulation of cash in Pakistan, which currently stands at 25%, compared to lower rates in neighbouring countries such as India and Bangladesh.
Read: FBR to include tax filers from AJK, GB in Active Taxpayers List
Furthermore, the new system will introduce performance-based incentives for tax officers, ensuring that their integrity and effectiveness are rewarded through quarterly assessments. The FBR has assured that no new revenue measures will be introduced to meet the budget target of PKR 12.97 trillion for FY25. Instead, the emphasis will be on closing existing loopholes and improving income declaration and tax compliance. |
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