Islamabad, February 12, 2025 – The National Assembly Standing Committee on Finance and Revenue has deferred the implementation of Section 114C of the Tax Laws (Amendment) Bill, 2024, which restricts economic transactions of non-filers.
The committee decided to postpone these measures until the Federal Board of Revenue (FBR) successfully implements necessary technological changes in its online systems.
This decision was made during a meeting of the National Assembly Standing Committee on Finance at the Parliament House on Tuesday. Bilal Azhar Kayani, Convener of the Sub-Committee of the Standing Committee on Finance and Revenue, presented a report on “The Tax Laws (Amendment) Bill, 2024,” which was subsequently adopted by the committee.
Minister of State for Finance, Ali Pervaiz Malik, stated that delaying the restriction on non-filers will not hinder the FBR’s ongoing efforts to document wealthy individuals who have yet to file income tax returns. “We have relied on non-filers as revenue spinners for too long without enforcing compliance. The tax system cannot function this way,” he emphasized.
He further highlighted that the FBR already has data on all immovable property transactions and will continue taking action against non-filers. “We will return to the committee with a technological solution for implementing Section 114C,” he assured.
The sub-committee, chaired by Bilal Azhar Kayani, recommended that the FBR should first demonstrate the updated online system before further consideration of the restrictions on non-filers. One proposal is to reconsider the section as part of the budget process in June 2025, allowing time for the development of user-friendly systems that minimize unintended consequences.
MNA Mirza Ikhtiar Baig expressed concerns that the restrictions on non-filers could lead to capital flight from Pakistan. Meanwhile, FBR Chairman Rashid Mahmood Langrial requested two months for the development of the necessary technological tools to implement the restrictions on non-filers.
The committee also recommended that the National Database and Registration Authority (NADRA), provincial excise departments, and land authorities cooperate with the FBR to expedite the new system’s development. FBR Chairman clarified that transactions by non-resident individuals and public companies would not fall under the non-filer restrictions.
Committee Chairman Syed Naveed Qamar endorsed the sub-committee’s recommendation to suspend the implementation of Section 114C until the FBR develops the required tools. He also urged the Revenue Division to clarify “cash and equivalent assets” and ensure the new system is fully functional within two months.
The sub-committee suggested an amendment to Section 114C, proposing that the term “Board” be replaced with “Federal Government” and that a value threshold be set to protect low- and middle-income citizens, particularly first-time property buyers. As per the committee’s instructions, the FBR has shared aggregate data on property transactions for FY 2023-24 to support this decision.