In steps to expand Pakistan’s tax net and to strengthen the economic situation, the federal government has permitted the Federal Board of Revenue (FBR) full authority under the newly passed Finance Bill, effective from July 1, 2025.
This regulation allows FBR officials and Inland Revenue Commissioners to investigate and forcibly register citizens who fall under the Sales Tax Act but have failed to register voluntarily.
To reinforce legislation, two new provisions, Clauses 14AC and 14AD, have been introduced. Clause 14AC authorizes Inland Revenue Commissioners to freeze the bank accounts of non-compliant individuals until they fulfill their registration obligations.
Moreover, the Senate Standing Committee on Finance has encouraged the inclusion of online educational academies and instructors in the taxable category.
FBR Chairman Rashid Langrial highlighted that these platforms can earn as much as Rs20 million monthly. These strategies highlight the government’s expansion of the tax net to include high-earning categories.
On the contrary, Senator Shibli Faraz opposed the regulation of taxing individuals earning from Rs600,000 to Rs1.2million annually, stating the purchasing power of the person earning Rs100,000 is just like Rs42,000.
Meanwhile, proposals to tax elite recreational clubs sparked differing opinions. Senator Mandviwala objected to targeting the elite clubs under the tax net, whereas most ministers and members encouraged taxation of elite clubs and not counting the general public.
The committee also revised property purchase regulations for non-filers. FBR initially imposed the limits up to 130% capital on property value compared to the non-filer’s declared asset. Whereas Senator Mohsin Aziz recommended of 500% increase in the limit, which was later approved by the committee.
Finance Minister Muhammad Aurangzeb noted that penalties on non-filers were increased in the previous fiscal year and hinted at further constraints on non-filers regarding property and vehicle acquisitions in the upcoming budget.
In conclusion, these economic amendments are part of a strategic framework aimed at enhancing compliance, reducing evasion, and ensuring a more equitable and sustainable tax regime for Pakistan’s evolving economic landscape.