Non-Filers Category Abolished: Restrictions Imposed on Property, Vehicles, International Travel, and Current Accounts

Islamabad  – In a significant move, the Federal Board of Revenue (FBR) has decided to eliminate the category of non-filers, imposing 15 strict restrictions on individuals who evade taxes. Of these, five key measures will be enforced immediately, which include bans on the purchase of property and vehicles, international travel, opening current bank accounts, and investing in mutual funds.

This initiative aims to close loopholes in the tax system and ensure greater compliance. The government will utilize advanced machine learning algorithms to identify non-filers, with the State Bank of Pakistan collaborating to track individuals whose income does not align with their financial transactions. Prime Minister’s approval has been secured, and an ordinance will soon be enacted to bring this change into effect.

FBR Chairman Rashid Mahmood Langrial pointed out that bank checks have essentially become an alternative currency in the country, which will now face tighter controls. He further mentioned that last year, only PKR 25 billion was collected from non-filers in the form of fees, a sum that falls far short of potential tax revenue. While industrialists have welcomed the move towards greater automation, they argue that without imposing taxes on the agricultural sector, the tax-to-GDP ratio will remain stagnant.

The government’s decision to dismantle the non-filer category marks a departure from past practices, where individuals could bypass certain taxes by paying a nominal fee. Under the new system, non-filers will no longer have this option, significantly tightening the net around tax evaders.

The FBR plans to introduce further restrictions on non-compliant individuals, focusing initially on five critical areas: property and vehicle purchases, investment in mutual funds, the opening of current bank accounts, and international travel (excluding religious travel). These measures are designed to broaden the tax base and bring greater accountability to the financial system.

A senior government official confirmed to *The News* that these new regulations will be enforced through an ordinance, which is currently being drafted in collaboration with the law ministry. The FBR chairman criticized the non-filers classification, noting that such distinctions are rarely seen globally and should be replaced with a more robust system of tax compliance.

“We are moving towards a more sophisticated approach, where modern machine learning and algorithms will help identify individuals who are not filing taxes,” Langrial stated.

He further elaborated that although PKR 25 billion was collected from non-filers last year, this figure represents only a fraction of the potential tax revenue. Moving forward, non-filers will face significant restrictions, including the inability to open conventional bank accounts, except for basic accounts designed for low-income individuals.

To further curb illegal financial activities such as smuggling, the FBR is also ramping up its automation and increasing workforce deployment at key border entry points across the country.

These changes represent a bold step towards modernizing Pakistan’s tax system, aiming for a more equitable distribution of tax liabilities and closing the gap between declared income and actual financial behavior.

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