The upcoming federal budget for FY 2025–26 is expected to introduce major reforms aimed at curbing tax evasion and tightening rules for those outside the tax net, according to official sources.
The Federal Board of Revenue (FBR) has suggested sharply increasing penalties for tax fraud detected through Point of Sale (POS) systems. If approved, fines would jump from the current Rs500,000 to Rs5 million.
Beyond higher penalties, the authorities are preparing for tough legal measures against businesses that operate without proper records or keep sales hidden from the POS system.
Non-filers, those not registered in the tax system, are expected to face strict financial restrictions in the new budget.
These may include bans on buying property and vehicles, as well as being barred from investing in mutual funds or stocks. Large financial transactions may also be limited for these individuals.
While earlier discussions had hinted at cutting off mobile SIMs or internet services for non-filers, sources within the FBR say the government has decided not to move forward with that idea.
Travel restrictions are also on the table. Under the new proposals, non-filers would not be allowed to travel abroad except for religious pilgrimages like Hajj and Umrah.
Another major change being considered is an increase in the withholding tax on cash withdrawals over Rs50,000, with the rate expected to double from 0.6% to 1.2%.