PTBP Web Desk
The Federal Board of Revenue (FBR) has introduced stringent measures under a new tax bill to enforce compliance with tax laws. The proposed legislation empowers Inland Revenue officials to seal business premises, restrict financial activities, and prohibit the opening of new bank accounts for unregistered individuals. These measures aim to strengthen tax compliance and ensure taxes are paid in accordance with income and consumption levels.
The implementation of these measures requires prior government approval. The bill seeks to map declared cash and assets in income tax returns to restrict financial transactions for non-compliant individuals. However, taxpayers are permitted to conduct financial transactions in the names of family members, provided the transactions align with declared cash and assets.
The government has introduced a clear definition of eligibility for conducting financial transactions. Eligible persons include immediate family members such as parents, spouses, children under 25, unmarried or widowed daughters, or special-needs dependents. Additional conditions stipulate that eligible individuals must specify their sources of funds in their most recent tax return.
Sufficient resources are defined as 130% of the cash-equivalent assets declared in the latest filed tax return. For companies or associations of persons, the financial transactions must align with declared sources of investment and expenditure statements in their financial statements.
The bill imposes strict restrictions on financial transactions for ineligible persons:
Motor Vehicles: Manufacturers and vehicle registration authorities will not accept applications from ineligible individuals for booking, purchasing, or registering motor vehicles.
Immovable Property: Transactions involving immovable properties exceeding a value notified by the FBR will be restricted.
Securities and Mutual Funds: Authorized personnel are prohibited from selling securities, including mutual funds and debt securities, to ineligible individuals.
Banking Restrictions: Banks are barred from opening or maintaining current, savings, or investor portfolio securities accounts for ineligible persons, except for Asaan accounts. Additionally, cash withdrawals exceeding limits notified by the FBR will not be allowed.
Certain financial transactions are exempt from these restrictions, including:
Purchase of rickshaws, motorcycle rickshaws, tractors, or pickup vehicles with engine capacities up to 800cc.
Financial transactions involving non-residents or public companies.
Transactions supported by inheritance or loans, provided the sources are declared in the tax return.
The FBR will notify limits for investment in securities and restrictions on the purchase of trucks and buses. Individuals who disclose their sources of investment and expenditure statements in their returns are exempt from these restrictions. Moreover, remittances and inheritance-related financial activities will not be pursued for concealment cases.
The bill includes provisions aimed at encouraging registration under tax laws. It introduces the concept of eligible persons for financial transactions and empowers income tax commissioners to hire experts and auditors for accurate tax collection assessments. By promoting transparency and compliance, the government seeks to expand the tax net and ensure equitable contributions from all citizens.
Non-filers face significant limitations under the new legislation. The restrictions are designed to incentivize registration and adherence to tax laws. Failure to comply may result in business premises being sealed and other financial activities curtailed.
The proposed tax measures signify the FBR’s commitment to strengthening tax compliance. By targeting non-filers and introducing robust mechanisms for monitoring financial transactions, the government aims to foster a culture of accountability and fairness in Pakistan’s taxation system.
