Chairman of the Federal Board of Revenue (FBR) Rashid Mahmood announced that the government will completely abolish the concept of non-filers of income tax returns from tax laws. This significant change aims to convert Pakistan’s cash economy into a documented one and to reduce the existing tax gap of Rs. 7.1 trillion.
During a detailed presentation at FBR Headquarters, Rashid Mahmood outlined measures to tackle non-filing and invited leading business and trade groups for a briefing on the planned transformation. Ali Pervez, the State Minister for Finance and Revenue, and senior FBR members were present to discuss these initiatives.
Mahmood emphasized that the FBR cannot tolerate non-filing and that the category of non-filers will be eliminated entirely. The previous plan to restrict asset purchases for non-filers has been expanded; the government will now remove the definitions of non-filers from the Income Tax Ordinance, effectively abolishing the category.
Read More: IMF Board Meeting Scheduled Today to Discuss Approval of Pakistan’s $7 Billion Loan
To enhance tax compliance, the FBR plans to establish disincentives for non-compliant taxpayers, linking registration and access to financial facilities such as investments and bank accounts to the filing of tax returns. He warned that if the situation does not improve, it would hinder the government’s ability to collect taxes, regardless of new measures.
The reforms will introduce a cap on cash cheque issuance, and the FBR will provide banks with information about taxpayers’ declared incomes to monitor any transactions that exceed set limits. This new system is expected to be operational in a few months, aiming to enhance tax compliance and increase the tax-to-GDP ratio while addressing concerns about high tax rates discouraging businesses and skilled individuals from remaining in Pakistan.
