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Monday June 23, 2025

Ban on key transactions by non-filers

Section 114C has been inserted in Finance Bill for imposing restrictions on economic transactions

By Our Correspondent
June 11, 2025
Representational image of cash withdrawal. — APP File
Representational image of cash withdrawal. — APP File

ISLAMABAD: The FBR has proposed a ban on making massive transactions by “ineligible persons”, such as purchasing of immovable property, vehicles and securities, in the Finance Bill 2025-26.

The Section 114C has been inserted in the Finance Bill for imposing restrictions on economic transactions. It introduces a framework to restrict high-value economic transactions, such as purchase of vehicles, immovable property and securities, by individuals and entities, which have not filed income tax returns, or cannot justify their financial capacity through formally declared resources. A new Section 175AA is proposed to be inserted into the Income Tax Ordinance, 2001. It empowers FBR to share tax-related information of high-risk persons with scheduled banks in Pakistan. This includes turnover, income (including taxable income) for one or more tax years, identification data (including bank account numbers) declared in income tax returns, wealth statements, financial statements, or any other document submitted to FBR, along with data-based algorithms as may be prescribed. In another drastic measure, the FBR proposed Section 14AC to bar operations of bank accounts. The commissioner shall have the powers to direct banking companies to bar operation of bank account of any person, who fails to get registered under the tax laws.

The Finance Bill states any application, by any ineligible person, for booking, purchase or registration of a motor vehicle, shall not be accepted or processed by any manufacturer of a motor vehicle or vehicle registering authority of Excise and Taxation Department, as the case may be: Authorities won’t accept or process applications for transferring immovable property above a notified value from ineligible persons. This clause will only take effect once the Federal Government notifies a specific value. No person can sell securities, mutual funds, or open an account for ineligible individuals or associations of persons. A banking company is restricted from opening or maintaining certain bank accounts for notified persons, except Asaan and Pensioner Accounts. This ban would also extend to allowing cash withdrawals exceeding a specified amount, as notified by the FBR.