Pakistan moves to block major transactions by ‘ineligible’ taxpayers

Pakistan's National Assembly Standing Committee on Finance and Revenue, chaired by Naveed Qamar, has submitted its recommendations on the Finance Bill, proposing a new 15th Schedule in the Income Tax Ordinance that defines restrictions on economic transactions by "ineligible persons."

Under the proposed measures, an "eligible person" is defined as someone who has either filed an income tax return for the previous tax year and demonstrated sufficient financial resources in their wealth statement (for individuals) or financial statement (for companies or associations), or declared adequate sources of investment and expenditure for specific transactions.

The committee’s proposal would bar manufacturers and vehicle registration authorities from processing applications by ineligible persons for booking, purchasing, or registering motor vehicles valued above PKR 7 million.

It would further prohibit the transfer or registration of immovable property worth more than PKR 100 million for commercial property and PKR 50 million for residential property unless the applicant is an eligible person.

Similar restrictions would apply to the financial sector. Investment accounts exceeding PKR 50 million in mutual funds, securities, or similar instruments could not be opened or maintained by ineligible individuals.

Additionally, a cumulative withdrawal ceiling of PKR 100 million would apply to all bank accounts held by such persons.

Last week, Syed Naveed Qamar, Chairman of the Standing Committee on Finance and Revenue, raised serious concerns after reviewing the government's strategy to combat tax evasion.

He criticized the Federal Board of Revenue (FBR) for failing to establish a reliable mechanism to identify "ineligible persons" engaging in high-value economic activities, including asset purchases, bank transactions, and investments.