Islamabad: The Standing Committee on Finance and Revenue on Thursday unanimously approved the Tax Laws Amendment Bill 2024, empowering the Federal Board of Revenue (FBR) to implement stringent measures aimed at curbing tax evasion and ensuring compliance.
The amendments introduce pre-audit mechanisms for high-value sales and mandate stricter checks on lavish purchases exceeding a taxpayer’s declared income. Chairman FBR Rashid Langrial, while briefing the committee, clarified that 95% of the population would remain unaffected, as the focus is on the top 5% of income earners who evade taxes despite their substantial wealth.
Under the new provisions, taxpayers must justify purchases exceeding 130% of their declared income by declaring additional resources in their tax returns. This includes luxury items, real estate, vehicles, and securities. The amendments also include pre-audit requirements for high-value transactions such as gold and foreign currency sales.
The bill introduces additional measures to boost transparency, including mandatory tax stamps, stickers, or barcodes for cigarettes and beverages to curb tax evasion in these sectors.
Finance Minister Muhammad Aurangzeb highlighted the necessity of these reforms to enhance Pakistan’s tax-to-GDP ratio to 13.5% within three years. Provinces are expected to contribute 3% to this target, ensuring a more balanced fiscal approach.
In a move to encourage financial inclusion, the committee recommended allowing pensioners and non-filers to open Asaan bank accounts, making banking services more accessible.
The Tax Laws Amendment Bill 2024 marks a significant step towards improving tax compliance and addressing the challenges posed by undeclared wealth and income. By targeting high-income earners and implementing robust checks, the government aims to foster a more equitable and transparent tax system.
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