Non-Filers to face THESE 15 restrictions under Pakistan’s tax overhaul

Non Filers To Face These 15 Restrictions Under Pakistans Tax Overhaul

ISLAMABAD – In a latest move to boost tax compliance and revenue, the government of Pakistan plans to end non-filer category from tax laws and implement over dozen 15 restrictions on non-filers’ activities.

FBR data highlights stark contrast in tax compliance with 94pc of middle-income taxpayers adhere to tax regulations, while only 29pc of the wealthiest 1pc do.

The government’s new plan includes gradually banning these stern restrictions, like foreign travel. Additionally, a proposed annual cash withdrawal limit of Rs30 million will be communicated to banks through the State Bank of Pakistan to discourage cheque-based cash withdrawals. The government also plans to purchase properties reported below market value in tax returns, a provision introduced in 2018 but not yet operational.

  • Non-Religious Travel Ban: Prohibition on non-religious travel.
  • Cash Withdrawal Limit: Restriction on annual cash withdrawals over Rs30 million.
  • Asset Purchase Ban: Non-filers cannot buy properties or vehicles.
  • Investment Restrictions: Banned from investing in the stock market and mutual funds.
  • Current Account Limitations: Restrictions on opening current bank accounts.
  • Higher Withholding Taxes: Imposition of higher tax rates for non-filers.
  • Income Proof for Property Purchases: Higher-income filers must justify income sources for property buys.
  • Explanations for Other Purchases: Lower-income filers must explain income sources for significant purchases.
  • Data Sharing with Banks: Information on non-filers will be shared to limit cheque withdrawals.
  • Property Purchases Below Market Value: The government will buy undervalued properties reported in tax returns.
  • Cheque Use Restrictions: Limitations on cheque usage for certain transactions.
  • Transaction Bans: Gradual bans on 15 types of transactions for non-filers.
  • No Tax Exemptions: Non-filers will not qualify for tax deductions or exemptions.
  • Business Opportunity Limits: Restrictions on conducting business activities.
  • Increased Scrutiny: Enhanced audits and scrutiny for non-filers.

FBR to launch crackdown on non-filers from Oct 1

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