The National Assembly Standing Committee on Finance will review the Tax Laws (Amendment) Bill, 2024, on Tuesday. The proposed legislation imposes tough restrictions on non-filers, barring them from purchasing or registering vehicles above 800cc, acquiring property beyond set limits, and conducting stock transactions over specific thresholds.
As per officials, while higher withholding tax (WHT) rates on non-filers will not be immediately abolished, a phased reduction will follow the bill’s passage. Changes in the WHT regime are expected in the 2025-26 budget to maintain revenue collection.
Non-filers will face additional restrictions on opening bank accounts and conducting certain financial transactions. However, they will still be allowed to purchase motorcycles, rickshaws, and tractors.
The bill empowers the Federal Board of Revenue (FBR) to freeze bank accounts and block property transfers for non-compliant individuals. These restrictions will take effect once the federal government issues a notification, with accounts unfrozen within two days of sales tax registration.
Chief Commissioners of Inland Revenue will have the authority to seal business premises, seize movable assets, or appoint receivers for managing taxable activities of non-filers.
Tax experts expressed concern about potential revenue losses from the gradual withdrawal of higher WHT rates, which currently contribute 70% to direct tax revenue.
The bill also prohibits the sale of securities, mutual funds, and account openings for non-filers. Financial institutions will be directed to restrict account operations for non-compliant individuals.
Parents, spouses, and children under 25 of registered taxpayers will be considered filers. Officials believe the changes will enhance compliance, expand the tax base, and ensure stricter enforcement of tax laws.
