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.
