ISLAMABAD: The Federal Board of Revenue (FBR) has taken a very significant step to ensure tax compliance by deciding to block the current and savings accounts of non-filers.
This move is part of the Tax Laws Amendment Bill 2024, which was approved by the Senate Standing Committee on Finance and Revenue on Friday.
Consequently, banking entities will not be able to open or maintain current or savings accounts for those individuals who do not file their tax returns.
Additionally, the FBR will also block cash withdrawals from bank accounts that exceed a certain amount, making it essential for individuals to file their tax returns to avoid any disruptions to their financial transactions.
In addition, the FBR will collaborate with banks to introduce a mechanism that restricts banking transactions based on a declared income of a citizen, which will be checked against his Computerized National Identity Card (CNIC).
This implies that in case a citizen‘s transactional activity does not go hand in hand with declared income, FBR will take strict actions against the concerned individual.
In addition, filers will have to declare their sources of income before making significant purchases like vehicles, properties, or investments in securities. In addition, they will also be allowed to purchase articles or properties amounting to 130% of the declared wealth, but anything purchased beyond this amount will force them to declare more income or resources in their tax returns.
The committee also approved the creation of pre-audit mechanisms on high-value sales– including gold and foreign currencies-for proper documentation and tax payment.
Cigarettes and beverages will also have to be sold with either a tax stamp, sticker or barcodes for the purpose of easy tracking by taxing authorities. Mostly targeted on raising tax revenue and limiting tax evasion these actions are likely to impact heavily on the country’s economic scale.
By requiring people to file their tax returns and verifying their income against their banking transactions, the FBR hopes to create a more transparent and equitable tax system.
Overall, these changes are expected to improve tax compliance and generate more revenue for the government, which can be used to fund public services and infrastructure development.
