The government has introduced stringent measures under the Tax Laws Amendment Bill 2024 to meet International Monetary Fund (IMF) conditions and enhance tax compliance. The proposed legislation includes the toughest penalties to date for non-filers and tax evasion.
Crackdown on Non-Filers
Individuals who fail to file taxes will face severe restrictions, including bans on purchasing property and vehicles or opening and maintaining bank accounts. Non-filers will also be prohibited from investing in securities or mutual funds. Unregistered businesses will not be allowed to open bank accounts, and existing accounts of defaulters may be frozen.
The legislation further restricts non-filers from booking, purchasing, or registering vehicles and bans property registration, verification, or transfer for these individuals. Tax commissioners will have the authority to seal businesses and seize movable assets belonging to defaulters.
Real-Time Monitoring and Cooperation
Banks will be required to share data on high-risk individuals with the Federal Board of Revenue (FBR). Property registrars and service providers must connect to a computerized system for real-time monitoring, initially implemented in Islamabad, to ensure compliance.
Taxation Based on Actual Income
The bill emphasizes taxation based on actual income for registered filers. The FBR will be empowered to appoint specialists for audits, investigations, legal actions, and asset valuations to improve enforcement.
Banking and Investment Restrictions
Non-filers will face additional penalties, such as restrictions on withdrawing funds above specified limits. However, small vehicles like rickshaws, motorcycles, tractors, and pickups with an engine capacity of 800cc or less are exempt from the purchase ban.
Facilitating Business Registration
To promote compliance, restrictions on businesses will be lifted within two days of successful registration.
The government’s decision aims to strengthen tax collection systems and enhance fiscal stability as part of its agreement with the IMF.
