Karachi, December 24, 2023 – The Federal Board of Revenue (FBR), Pakistan’s premier tax agency, is gearing up to suspend bank accounts of individuals who have failed to file their income tax returns, as per an official statement released today.
In an effort to bolster the country’s financial foundation and address the pervasive issue of tax evasion, the FBR has issued a stern warning to citizens who have yet to comply with the income tax return filing requirements. Failure to do so will result in the suspension of essential utilities, including bank accounts, according to the official statement.
Pakistan, a nation blessed with a diverse landscape ranging from the majestic heights of the Himalayas to the fertile plains nourished by the Indus River, is grappling with a narrow tax base. Despite abundant natural resources, a sizable workforce, and the presence of four distinct seasons, only approximately 5.2 million people are registered in the tax system and filed their income returns in 2022.
The FBR acknowledged the critical challenges facing the nation’s fiscal landscape, including rampant tax evasion, an alarmingly low tax-to-GDP ratio, and a meager number of tax filers. This situation severely hampers revenue generation, leading to inadequate funding for essential public services and crucial socio-economic development initiatives.
To address these challenges, the FBR has launched a nationwide drive to expand the tax base. The initiative aims to encourage all eligible individuals and those earning taxable income to register with the tax system and file their income returns. The FBR projects the addition of 1.5 million new taxpayers during the current year.
The FBR has leveraged third-party information to identify hundreds of thousands of financial transactions conducted by individuals still outside the tax net. This information is publicly accessible on the FBR’s official website (www.fbr.gov.pk) under the section titled “MALOMAAT.” Interested parties can easily register and review various transactions undertaken in recent years.
Additionally, the FBR, through its nationwide field formations, is actively conducting surveys and collecting information about businesses and commercial activities. This data will be made available on the FBR website in the near future.
The FBR emphasized that it possesses data on almost all individuals eligible to file income tax returns. Non-compliant individuals are urged to take advantage of the grace period, visit their nearest tax office, and register to avoid consequences such as penalties, fines, utility disconnection, bank account suspension, and, in extreme cases, restrictions on movement on motorways and abroad.
As the FBR intensifies its efforts to bring non-compliant individuals into the tax net, citizens are advised to act promptly to avoid the potential repercussions outlined by the tax authority. The FBR aims to strengthen the nation’s financial landscape through enhanced tax compliance and a broader tax base.
