Karachi, July 10, 2025 — Despite Parliament’s bold move to curb undocumented wealth and penalize non-compliant taxpayers, ineligible persons continue to enjoy restriction-free transactions due to a strategic delay in the law’s implementation.
Although the Finance Act, 2025 formally introduced Section 114C into the Income Tax Ordinance, it appears the real impact of this legislation remains symbolic—at least for now.
The law was intended to restrict significant economic transactions by ineligible persons—individuals who have taxable income but have not filed their tax returns or disclosed sufficient financial resources. However, a hidden clause in sub-section (5) of Section 114C has neutralized the law’s power by allowing the government to enforce the restrictions at its discretion.
According to the clause, “All or any of the restrictions or limitations imposed on the ineligible person under this section shall come into force on such date as the Federal Government may, by notification in official Gazette, appoint.” This single line of text has effectively frozen the entire legal mechanism that was expected to regulate transactions made by tax defaulters.
A senior official of the Federal Board of Revenue (FBR), while speaking to PkRevenue, confirmed that the restrictions are not yet in force. “No notification has been issued. The government has postponed implementation,” the official admitted, implying that ineligible persons can continue major transactions without consequence.
Tax expert Zeeshan Merchant pointed out that this clause was a late addition—absent from the original Finance Bill—and was slipped in during final legislation. “This isn’t just a delay—it’s a deliberate backdoor to let ineligible persons operate freely while projecting the illusion of reform,” Merchant stated.
The types of transactions restricted under Section 114C include high-value purchases such as vehicles, immovable property, large investments in financial instruments, and hefty bank withdrawals. These prohibitions were crafted to force non-filers into the formal economy. Yet, without enforcement, the system allows ineligible persons to engage in such transactions with full immunity.
Analysts argue that the law’s delayed enforcement undermines trust in tax reforms and sets a dangerous precedent for selective accountability. Critics now label the move as one of political convenience—granting the government control over who faces consequences and when.
Until an official notification is issued, ineligible individuals remain untouched by the law, continuing unrestricted economic transactions—leaving Pakistan’s documented taxpayers to bear the brunt of an uneven system.