Removing the non-filers from Pakistan’s tax system is a top priority for the Federal Board of Revenue (FBR). The FBR will apply severe penalties to those who neglect to file income tax returns as of October 1, 2024. The government has taken this decision as part of its ambitious strategy to fulfil an annual target of over Rs 13 trillion while also improving tax compliance. (Ansari, 2024)

A number of important activities, including international travel (apart from pilgrimages), real estate purchases, and car transactions, will be severely restricted for non-filers. However, low-income people will be spared from this restriction. They will also be prohibited from opening ordinary bank accounts and investing in mutual funds. In addition, non-compliant individuals may have their utility services and cell SIMs terminated, and those who do not file reports by the September 30 deadline would pay double withholding taxes.

In order to eventually guarantee that all financial transactions take place through official banking channels, the FBR intends to progressively extend these limitations across 15 distinct categories of transactions. These steps are intended to increase openness in Pakistan’s economy, which has long suffered from tax evasion, and to increase the tax base. The progressive elimination of the non-filer classification is consistent with international standards and guarantees that law-abiding citizens make a tax contribution to the government. (Desk, 2024)

References

Ansari, I. (2024, september 23). FBR decides to launch a strict crackdown against non-filers starting October 1. Retrieved from the express tribue: https://tribune.com.pk/story/2498162/fbr-decides-to-launch-a-strict-crackdown-against-non-filers-starting-october-1

Desk, M. (2024, september 25). FBR to abolish non-filers category. Retrieved from profit: https://profit.pakistantoday.com.pk/2024/09/25/fbr-to-abolish-non-filers-category/