The government has put forward a major revision to the tax classification system under Section 115 of the Income Tax Ordinance, aiming to remove the current distinction between filers and non-filers. This change could render over 10 crore Pakistanis ineligible to buy a car.
New Rules Target Non-Compliant Individuals
According to the proposed reforms, only individuals who have submitted their income tax returns and wealth statements will be allowed to:
- Purchase vehicles or real estate,
- Invest in shares, mutual funds, or government securities, and
- Open certain types of bank accounts.
Asset and Loan Access Tied to Tax Compliance
The plan also requires that anyone applying for bank loans, credit, or financing must verify their income and repayment ability through officially declared financial records. People with unreported income will be barred from using these services unless they choose to file a tax return.
Declaration Option for Previously Unregistered Individuals
To bring more people into the formal tax system, the government will introduce “Option B”, a one-time chance for individuals to declare their assets, pay the necessary taxes, and become eligible to participate in the formal financial system.