What does Pakistan's proposed ordinance on tax evasion include?

Pakistan's Federal Board of Revenue (FBR) has started work on a draft ordinance that would impose a range of penalties on tax evaders, sources informed Nukta on Tuesday.

The move comes after an internal FBR assessment revealed a tax shortfall of over PKR 220 billion for the first quarter (July-September) of fiscal year 2024-25 (FY25).

The sources said that the prime minister recently approved a transformation plan for the FBR, and the tax collection authority now wanted to put the plan into action through the ordinance's promulgation. FBR has suggested strict measures against unregistered manufacturers, importers, wholesalers, and retailers under the ordinance.

The measures proposed in the ordinance are as follows:

• Establishing model taxpayer offices, hiring auditors, and sharing data with financial institutions.
• Disallowing input tax claims for importers selling to unregistered buyers.
• Blocking utilities, freezing bank accounts and property transactions of non-filers and unregistered wholesalers and manufacturers.
• Preventing non-filers from purchasing motor vehicles as well as immovable properties.
• Preventing non-filers from investing in securities and mutual funds.
• Imposing maximum cash deposit as well as cash withdrawal limit for taxpayers and non-filers of PKR 30 million.
• Establishing enforcement stations on 24 bridges of Indus and Hub rivers.
• Hiring of JCOs and sepoys on contract basis from Pakistan Army.