Pakistani Finance Minister Muhammad Aurangzeb presented the Tax Laws (Amendment) Bill, 2024, to the National Assembly on 18 December 2024 to strengthen measures against non-filers.

The proposed bill introduces strict measures targeting non-filers, aiming to enhance tax compliance. It seeks to prohibit non-filers from opening or operating bank accounts and restrict their ability to transfer immovable property. Additionally, non-filers will be barred from purchasing vehicles with engine capacities above 800CC, though exceptions are made for motorcycles, rickshaws, and tractors. Authorities will also have the power to freeze bank accounts and seize properties.

Key amendments target the Income Tax Ordinance, 2001, Sales Tax Act, 1990, and Federal Excise Act, 2005.

The Income Tax Ordinance amendments introduce changes to Section 114C, which now classifies individuals as “Eligible” or “Ineligible” for tax purposes. Eligible persons, who meet specific filing and resource criteria, will face fewer restrictions, while Ineligible persons will have limits on transactions, including buying vehicles, property, and securities. Banking restrictions are also imposed, with exemptions for certain cases. Additionally, Section 175AA requires banks to share taxpayer information with authorities to identify high-risk individuals.

The Sales Tax Act amendments focus on enhancing compliance, including the introduction of a data-based risk management system to limit tax claims based on taxpayer profiles. The bill also empowers tax authorities to take stronger actions, such as freezing accounts, seizing assets, and sealing premises of non-registered businesses. Changes to input tax credit limits will provide flexibility, and the role of external experts in audits and investigations will be expanded.

Under the Federal Excise Act, the bill introduces provisions to seize goods without proper tax stamps, barcodes, or labels. It extends authorities’ powers to confiscate counterfeit goods and empowers the Board to delegate confiscation authority to officials.