FBR to Block Bank Accounts of Non-Filers!

The Federal Board of Revenue (FBR) has taken a decisive step to boost tax compliance by targeting individuals who fail to file their taxes. As part of the Tax Laws Amendment Bill 2024, recently approved by the Senate Standing Committee on Finance and Revenue, the FBR has been granted the authority to block the current and savings accounts of non-filers.

Banks have been instructed not to open or maintain accounts for individuals who have not filed their taxes. Additionally, the FBR will restrict cash withdrawals from existing accounts if the amount exceeds a specified limit. This move aims to encourage tax compliance and reduce tax evasion by limiting banking transactions that do not correspond with an individual’s declared income.

In cooperation with banking institutions, the FBR will monitor transactions based on individuals’ declared income, which is linked to their CNICs. This will allow authorities to identify discrepancies between a person’s financial activity and their reported earnings. For example, any purchases that exceed 130 percent of a person’s declared income will prompt a requirement to provide additional income sources or resources in tax returns.

Filers will also face more stringent rules when making significant purchases, including vehicles, property, or securities. They will need to declare the sources of their income to justify their ability to afford such purchases. Furthermore, pre-audit measures will be introduced for high-value transactions such as gold and foreign currency exchanges, in order to ensure thorough monitoring.

The FBR is also focusing on proper collection of excise duties. Products like cigarettes and beverages will now require tax stamps, stickers, or barcodes to verify that taxes have been paid, addressing concerns over underreporting in certain industries.

These new regulations are expected to significantly enhance tax compliance in the country. The FBR’s efforts aim to close tax system loopholes and ensure that all citizens contribute fairly to the economy. For taxpayers, these changes emphasize the importance of timely filing and accurate income declarations to avoid penalties and restrictions on their bank accounts.