New Tax Laws to Restrict Non-Filers from Buying Cars, Property, and Stocks
- Abeera Marium Siddiqui
- January 21, 2025
- 11:50 am
- 33
- Current Affairs
The new tax laws propose strict restrictions on non-filers. These changes will limit their ability to buy cars, property, and stocks. The National Assembly Standing Committee on Finance is set to review the Tax Laws (Amendment) Bill, 2024. If passed, these laws will significantly impact non-filers.
Non-filers will face a ban on registering vehicles over 800cc. They will also be restricted from buying property above a specific value. Additionally, trading stocks beyond certain thresholds will not be allowed. These measures aim to improve tax compliance and expand the tax base in Pakistan.
Withholding Tax Adjustments
The bill also suggests changes to the withholding tax (WHT) rates for non-filers. Higher WHT rates will gradually phase out by the 2025-26 fiscal year. For now, these rates are a key source of direct tax revenue. Tax experts worry this phase-out could reduce government earnings.
Restrictions on Financial Activities
The proposed law limits other financial activities for non-filers. They cannot open new bank accounts or conduct multiple financial transactions. Financial institutions will freeze the accounts of non-compliant individuals. However, once these individuals register for sales tax, their accounts will be unfrozen within two days.
Non-filers will still be allowed to buy motorcycles, rickshaws, and tractors. However, their ability to transfer properties or operate bank accounts will be heavily restricted.
Role of the Federal Board of Revenue (FBR)
The Federal Board of Revenue (FBR) will have more authority under this bill. The FBR can release lists of non-filers and seize their properties. Business premises can be sealed, and receivers can be appointed to manage taxable activities. Inland Revenue officials can also seize assets to enforce compliance.
Family Provisions
Filers’ immediate family members, including parents, spouses, and children under 25 years old, will automatically qualify as filers. This change encourages collective compliance within families.
Financial Institutions and Enforcement
Banks and other institutions will enforce these restrictions. They will block non-compliant individuals from selling securities or mutual funds. This strict approach aims to create a more transparent financial system.
Conclusion
The Tax Laws (Amendment) Bill, 2024, introduces sweeping changes to tackle tax non-compliance. These measures target non-filers while offering phased adjustments to withholding tax rates. The law’s full effect depends on the federal government’s notification. Once enforced, these rules promise to improve tax compliance and accountability in Pakistan.
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