Islamabad, June 12, 2025 – The Finance Bill 2025 has proposed sweeping powers for the Commissioner Inland Revenue of the Federal Board of Revenue (FBR) to clamp down on individuals and businesses who fail to register under the Sales Tax Act, 1990.
The proposed measures aim to improve compliance and broaden the sales tax base by targeting unregistered persons through direct financial and administrative restrictions.
As outlined in the commentary issued by PwC A.F. Ferguson & Co., the Commissioner will be authorized to issue written directives to banking companies, scheduled banks, and other financial institutions to block the bank accounts of any person who is liable to be registered but has not fulfilled their sales tax registration obligations. This move is intended to pressure non-compliant individuals into complying with the Sales Tax Act.
Persons affected by such orders may file an appeal before the Chief Commissioner Inland Revenue within 30 days of receiving the notice. Once the person gets registered under the Sales Tax Act, the Commissioner is obligated to immediately issue an order to lift the restriction on their bank account operations.
In addition to banking restrictions, the Commissioner will also be empowered to prevent the transfer of immovable property by unregistered persons. Property registering authorities may be directed, through a formal written order, to halt any transaction related to such individuals. As in the case of bank accounts, this restriction can be lifted once the individual complies with the sales tax registration requirements.
The Finance Bill also proposes further coercive measures to be exercised by the Chief Commissioner against persistent defaulters. These may include sealing of business premises, seizure of movable property, or appointment of a receiver to manage the taxable operations of the unregistered entity. However, such actions must follow a due process which includes public notification, open hearings by a committee comprising the Chief Commissioner, the concerned Commissioner, and a representative from trade bodies, and publication of the final decision online and in print media.
These proposals, once enacted, will equip the FBR with more direct and enforceable tools to bring unregistered entities into the formal sales tax net, thus promoting fairness, compliance, and a level playing field across the economy.