ISLAMABAD: In an aggressive move to combat tax evasion and strengthen revenue collection, the federal government has decided to forcibly register non-filers, aimed at enhancing the efficiency of Pakistan’s tax system and bring more individuals and businesses into the formal tax net.
The new policies, outlined in the approved Finance Bill 2025, will be enforced from July 1, 2025. One of the major highlights of the budget is the expanded authority granted to the Federal Board of Revenue (FBR). Under the new provisions of the Sales Tax Act, FBR officials—including Inland Revenue Commissioners—can now forcibly register individuals and businesses who are legally required to register for sales tax but have failed to do so voluntarily.
These measures are designed to close long-standing loopholes that allow businesses to operate outside the formal tax framework. The FBR will now be empowered to conduct investigations and initiate enforcement action against non-compliant entities.
To further strengthen compliance, two new sections—14AC and 14AD—have been added to the Sales Tax Act. These clauses introduce strict legal consequences for non-filers and individuals or businesses who intentionally avoid tax registration.
Under Section 14AC, the Inland Revenue Commissioners will have the authority to freeze the bank accounts of any unregistered taxpayer through a formal written order. This financial restriction will remain in place until the individual or business completes their registration with the FBR. These powers are intended to apply pressure on habitual evaders and bring them into the tax net.
Tax professionals and policy analysts view these measures as a positive step toward improving transparency, reducing the undocumented economy, and increasing government revenue. They argue that broadening the tax base is essential for sustainable economic growth and reducing Pakistan’s reliance on external debt.
However, some stakeholders have expressed concerns about the potential misuse of the FBR’s expanded powers. Business groups and civil society organisations have called for strict checks and balances to prevent harassment or unfair targeting under the new laws.
To ease the transition and address apprehensions, the government has assured that it will provide facilitation, awareness campaigns, and simplified procedures for tax registration and filing. The objective, officials say, is to implement the new reforms in a fair, transparent, and business-friendly manner, without creating undue burden on genuine taxpayers.
The Budget 2025 marks a significant shift in Pakistan’s tax enforcement strategy, signalling the government’s intent to crack down on tax evasion and strengthen the country’s fiscal foundation through an inclusive, technology-driven taxation system.
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