The government is preparing to introduce a new law aimed at limiting the financial activities of non-tax filers in the country. The proposed changes are part of the Tax Laws (Amendment) Bill, 2024, which will be discussed by the National Assembly Standing Committee on Finance this week.
The legislation seeks to restrict non-filers from purchasing or registering vehicles over 800cc, acquiring property, or buying stocks. However, the process of reducing higher withholding tax (WHT) rates for non-filers will not take effect immediately. It is planned to be phased out gradually in the 2025-26 fiscal year budget.
The bill also introduces additional measures to encourage tax compliance. Non-filers may face restrictions when opening bank accounts or conducting multiple financial transactions. Still, they will be allowed to purchase motorcycles, rickshaws, and tractors without any restrictions.
To enforce these new rules, financial institutions will be given the authority to freeze the accounts of unregistered individuals. Property transfers by non-filers may also be blocked. However, these accounts could be reactivated within two days after the individual registers for sales tax.
The Federal Board of Revenue (FBR) will play a key role in implementing these changes. It will have the power to release lists of non-registered individuals, seize their properties, and enforce compliance through various measures. These include sealing business premises and appointing receivers to manage businesses.
An interesting provision in the bill ensures that immediate family members—parents, spouses, and children under 25 years of age—of registered filers will automatically qualify as filers.
Once the bill is approved, the government will issue a notification to start its implementation. This move aims to improve tax compliance and ensure that more people contribute to the national economy.
