Karachi, December 18, 2024 – In a step toward enhancing tax compliance, the federal government has proposed restrictions on the transfer of immovable property for individuals or entities failing to register under the Sales Tax Act, 1990.
This measure was introduced as part of the Tax Laws (Amendment) Bill, 2024, tabled in the National Assembly on Wednesday. The proposed amendment, through the introduction of Section 14AD to the Sales Tax Act, grants the Commissioner the authority to bar property transactions by non-compliant individuals.
According to Section 14AD, sub-section (1) empowers the Commissioner to direct property registration authorities to halt the transfer of immovable property owned by individuals or entities that have not registered for tax purposes. This directive, issued through a formal written order, aims to compel non-registered persons to comply with tax laws by restricting access to property-related transactions.
Sub-section (2) provides relief for individuals who subsequently fulfill their tax registration obligations. Once registered under the Sales Tax Act, the Commissioner is required to issue an order to lift the restriction on property transfers. This process must be completed within two working days, ensuring minimal delay for compliant taxpayers.
To ensure fairness, sub-section (3) offers an appeals mechanism for individuals or businesses dissatisfied with the Commissioner’s decision. Affected parties may file an appeal with the Chief Commissioner of Inland Revenue within 30 days of receiving the directive. This provision introduces a layer of accountability and ensures that taxpayers have recourse against potentially erroneous decisions.
The implementation of these measures will commence on a date specified by the Federal Board of Revenue (FBR) through a notification in the official Gazette, as outlined in sub-section (4).
This amendment is part of the government’s broader strategy to tighten enforcement and broaden the tax net. By targeting non-compliance in property transactions, the government aims to encourage registration under the Sales Tax Act and enhance revenue collection. The restriction on property transfers is expected to be a powerful deterrent against tax evasion, as immovable property is often a significant asset class. If implemented effectively, this measure could significantly boost Pakistan’s efforts to strengthen its tax system and ensure equitable financial accountability across all sectors.