Pakistan’s Federal Board of Revenue (FBR) Chairman, Rashid Langrial, emphasized that 95% of households would remain unaffected by the government’s proposed tax legislation, which seeks to ban economic transactions for “ineligible” individuals and businesses. This measure, part of the Tax Laws Amendment Bill 2024, aims to increase tax collection by Rs 5 trillion over the next five years. Langrial discussed these plans during a briefing to the Senate Standing Committee on Finance.
The new bill targets the registration and regulation of businesses and individuals within Pakistan’s tax system. Among its provisions are bans on purchasing cars, properties, and holding bank accounts for those not eligible under the new rules. The bill also grants powers to freeze bank accounts, confiscate properties, and limit cash withdrawals for ineligible persons. Finance Minister Muhammad Aurangzeb acknowledged the public’s lack of trust in the FBR and highlighted the necessity of restoring taxpayer confidence to expand the tax base.
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Despite these measures, there was skepticism from lawmakers about the effectiveness of the legislation in expanding the tax base. Senator Shibli Faraz of the opposition questioned how the new bill differed from past efforts. Langrial responded that technological interventions, such as the faceless appraisal system, have already shown a reduction in corruption within the FBR. However, concerns about the bill’s potential to create new avenues for bribery and its impact on the economy were raised by several committee members.
The legislation is set to undergo further review as part of the government’s ongoing efforts to reform the tax system. The bill, which also proposes penalties for non-compliance, will require broader participation from Pakistan’s taxpayers to achieve the targeted revenue increases.
