The federal government is gearing up to introduce strict new measures against tax non-filers in the upcoming budget as part of its commitments made to the International Monetary Fund (IMF) during ongoing negotiations.
According to government insiders, non-filers will also be restricted from making large financial transactions and banned from buying vehicles and property, as Pakistan prepares to remove the non-filer category altogether from its tax system. The decision is part of a broader strategy to boost revenue collection and fulfill IMF conditions linked to the country’s ongoing loan program.
IMF tightens loan conditions
The IMF has reportedly tightened the terms of its loan facility, expressing concerns over external economic risks such as rising US tariffs and regional tensions with India. The Fund has demanded timely adjustments in electricity and gas prices, and has also called for a gradual rollback of tax incentives offered to special economic zones.
Reforms in tax system underway
Sources in the Federal Board of Revenue (FBR) revealed that work is already in progress to reform the tax system and make it effective and transparent. This includes:
-
Eliminating the non-filer category.
-
Third-party data analysis to detect tax defaulters.
-
Activation of the Compliance Risk Management System in Islamabad, Karachi, and Lahore.
-
Plans to extend this system to corporate tax units.
During the IMF briefing, officials acknowledged that the Tajir Dost Scheme, launched to bring retailers into the tax net, had failed to meet its targets. However, a notable 51% increase in the number of filers in the traders and wholesalers category was achieved after an increase in withholding tax on unregistered shopkeepers.
As per sources, it has been decided in the budget talks between Pakistan and the IMF to widen tax net and take strict action against non-filers.
