Prime Minister Shehbaz Sharif has approved a series of stringent tax enforcement measures, including a ban on banking and financial transactions for non-filers of tax returns.
According to media reports, the new policies are part of the Federal Board of Revenue’s (FBR) Indigenous Transformation Plan, which was presented to the prime minister by FBR Chairman Rashid Mahmood Langrial during a meeting at the PM’s secretariat.
The plan proposes freezing the bank accounts of unregistered manufacturers and wholesalers with turnovers above Rs250 million, along with a Rs1 million penalty. For retailers with annual turnovers exceeding Rs100 million, similar measures will apply.
A significant part of the new strategy involves restricting non-filers from acquiring cars, property, or financial instruments and from opening bank accounts, except for basic accounts like the Asaan Account. Those declaring income above Rs10 million will retain these privileges, but those declaring less must justify their income sources before making large purchases.
It was highlighted that only 14% of manufacturers are registered for sales tax, with a large portion of wholesalers and retailers also operating outside the tax net.
To address this, the FBR proposed using digital invoicing and issuing notices to unregistered entities. Severe penalties, including freezing bank accounts and restricting utility services, will be imposed on non-compliant businesses.
The initiative also includes reducing the circulation of cash in Pakistan, which currently stands at 25%, compared to lower levels in neighboring countries like India and Bangladesh.
The FBR’s new system will incentivize tax officers based on their integrity and performance, with quarterly assessments determining rewards.
The prime minister was assured that no additional revenue measures would be announced to meet the budget target of Rs12.97 trillion for FY25. Instead, the focus would be on closing loopholes and improving the declaration of income and tax payments.
