ISLAMABAD – In a major step to widen the tax net, the federal government on Wednesday granted the Federal Board of Revenue (FBR) the authority to forcibly register non-filers and take stringent action against those evading tax registration.
The new powers are part of the approved Finance Bill, which introduced major amendments to existing tax laws and would come into effect from July 1, 2025.
The new legislation, if a person is eligible for registration under the Sales Tax Act but fails to register voluntarily, an authorized FBR officer or Inland Revenue Commissioner will have the power to register the individual compulsorily after conducting an investigation.
The bill also introduces two new clauses — 14AC and 14AD — aimed specifically at penalising non-filers and those who deliberately avoid registration.
Clause 14AC grants the Inland Revenue Commissioner the authority to freeze the bank accounts of unregistered individuals through a written order. The freeze will remain in place until the person complies with registration requirements.
The measures are part of the government’s broader efforts to strengthen documentation and increase revenue by bringing more individuals into the formal tax system.
Meanwhile, the Senate Standing Committee on Finance approved a proposal to impose taxes on online educational institutions and academies as part of broader budgetary measures for the upcoming fiscal year.
The decision was taken during a session chaired by Committee Chairman Senator Saleem Mandviwalla.
FBR Chairman Rashid Langrial briefed the committee, saying that the online academies are earning up to Rs20 million per month, and the individuals teaching online would now be liable to pay taxes.
During the session, Senator Shibli Faraz objected to taxing individuals with monthly salaries ranging between Rs600,000 to 1.2 million, arguing that with inflation, a salary of Rs100,000 effectively amounts to PKR 42,000 in real value.
FBR also proposed taxation on income generated by elite clubs.
However, Mandviwalla opposed the idea while FBR Chairman insisted the move targets lavish clubs benefiting only around 300 people and not the general public. Most committee members supported taxing club revenues.
Minister of State for Finance Bilal Azhar Kayani added that taxes would apply only if club income exceeds expenses, noting that this primarily impacts privileged groups.
Additionally, the committee approved a proposal to raise the property purchase limit for non-filers. FBR had initially proposed a 130% cap on property value compared to a non-filer’s declared assets, but Senator Mohsin Aziz recommended increasing the limit to 500%. The proposal was accepted by the committee.
Finance Minister Muhammad Aurangzeb informed the panel that penalties on non-filers were increased last year and that the government is taking concrete steps to bring non-filers into the tax net.
The FBR also suggested restrictions on property and vehicle purchases by non-filers in the forthcoming budget.
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