Islamabad: The Federal Board of Revenue (FBR) is set to revamp its tax compliance framework by phasing out the non-filer status and introducing stringent measures to prevent tax evasion, as revealed in recent updates. This new strategy aims to tighten regulations on major financial transactions for those failing to file tax returns.

According to Zameen.Com, under the new ordinance being developed in collaboration with the law ministry, the FBR will enforce five key restrictions targeting non-filers. These include bans on purchasing property and vehicles, restrictions on international travel (with exceptions for religious purposes), limitations on opening current bank accounts, and prohibitions on investing in mutual funds.

FBR Chairman Rashid Mehmood pointed out that conventional methods, such as bank checks, have become less effective in tracking tax compliance, noting a collection of only PKR 25 billion from non-filers last year. The FBR plans to implement advanced machine learning technologies and algorithms to more accurately identify and monitor individuals whose spending does not correlate with their reported income.

The chairman also mentioned the support from industrialists for automating tax processes but cautioned that the lack of taxation in the agriculture sector might undermine efforts to improve the tax-to-GDP ratio. The new restrictions are part of a broader initiative to enhance tax compliance and expand the tax base, effectively eliminating the option for individuals to bypass tax obligations through nominal fees on certain transactions.