The government has resolved to remove non-filers from the tax system and eventually outlaw their 15 categories of operations, after receiving rare backing from Pakistan’s leading businesses for increasing income from existing filers and penalizing non-compliant persons.
The Federal Board of Revenue (FBR) processed income tax returns data, which revealed that Pakistan’s middle-class taxpayers were 94% compliant, compared to 29% compliance among the 1% richest Pakistanis.
The administration feels that this justifies tightening the noose around return filers.
The vast majority of the country’s leading manufacturers, business sector officials, and fast-moving consumer goods corporations backed the government’s new tax strategy, which aims to capture all filers while penalizing non-filer.
They expressed their support during a consultative meeting at the FBR headquarters.
The government intends to remove the category of non-filer and prohibit the usage of checks for cash withdrawals beyond a specific level, FBR Chairman Rashid Langrial told the participants.
Initially, the objective was to prohibit non-filers from purchasing assets. However, the government intends to remove the definitions of non-filers from the Income Tax Ordinance, followed by the abolition of Schedule 10.
Schedule 10th offers double withholding tax rates for non-filer on numerous transactions as compared to the ordinary rates. “The FBR hasn’t utilized the data mines accessible to it, so it is now moving toward this new plan,” said Ali Pervaiz Malik.
The FBR chairman stated that 15 sorts of transactions by non-filers will be prohibited gradually, including non-religious travel. “You cannot create your personal currency by issuing cheques as a substitute to cash, thus, Rs30 million per year on cash withdrawals have been proposed,” Langrial commented.