Tax laws bill may be part of FY26 Finance Bill: Non-filers to face curbs on economic deals

ISLAMABAD: The government is likely to make Tax Laws (Amendment) Bill, 2024 part of the next Finance Bill (2025-26) to impose restriction on economic transactions of non-filers, it is learnt.

The Federal Board of Revenue (FBR) has yet not demonstrated necessary technological changes in its online systems for enforcement of new Section 114C (restriction on economic transactions of non-filers) of Tax Laws (Amendment) Bill, 2024.

FBR Chairman Rashid Mahmood Langrial had requested the committee to give two months’ period for development of technological tools for the implementation of this section 114C dealing with the restriction on economic transactions of certain persons. In February 2025, National Assembly Standing Committee on Finance had deferred this section till the FBR make changes in its online systems.

Amended tax laws to tighten noose on non-filers

At that time, former Minister of State for Finance, Ali Pervaiz Malik categorically conveyed to the committee that we will come back to the committee with the technological solution for implementing new section 114C (restriction on economic transactions of non-filers) of Tax Laws (Amendment) Bill, 2024.

He categorically conveyed to the committee that deferment of the new section (bar on transfer of immovable property) would not stop the FBR from the ongoing exercise of documenting wealthy people and non-filers of income tax returns. “We used non-filers as revenue spinners and never prosecuted them. The tax system cannot operate like that in our country”, he said.

The FBR has visibility of all kinds of immovable property transactions data and we would continue to take action against non-filers, he said.

The committee had recommended that the FBR should give a demonstration of the updated online system/application before further consideration of section 114C of Tax Laws (Amendment) Bill, 2024.

The FBR has committed to provide the demonstration to the committee. One option regarding the timing is to reconsider this section as part of the budget process in June 2025.

During the intervening period, the FBR may focus on preparing the necessary technological changes, ensuring maximum user-friendliness and facilitation for taxpayers/users, and mitigating any unintended consequences, sub-committee recommended. The committee also issued instructions to National Database and Registration Authority (Nadra), provincial excise departments and provincial land authorities to facilitate FBR in developing the new system, FBR chairman added.

The FBR chairman said that transactions made by a non-resident person or a public company would not be covered under the Tax Laws (Amendment) Bill, 2024.

The chair emphasised that the Revenue Division should revisit Clause (5)(a) to provide greater clarity on the term “cash and equivalent assets.” He also directed the Revenue Division to finalise the updated online system/mobile app and present a demonstration to the committee within two months.

Copyright Business Recorder, 2025