FBR Partners with Banks to Tackle Tax Evasion with Account Insights

KARACHI: Pakistani authorities are intensifying efforts to combat tax evasion by introducing stricter measures to ensure compliance. As part of this initiative, banks will now have access to income tax return data, enabling them to cross-check customer banking records with declared financial information. This step aims to identify discrepancies and ensure accountability among taxpayers.

The new rule is part of the Tax Laws (Amendment) Bill 2024, which was introduced in the National Assembly and will make things harder for people who don’t file taxes.

The amendment suggested limits on buying and selling cars, real estate, and securities. It also suggested limits on opening new bank accounts, using current ones, and taking cash out of banks.

FBR Implements Stricter Tax Compliance Rules

According to the new changes, the FBR, which is in charge of collecting taxes, will be able to share information with banks, especially about people who are quite risky. Financial institutions will have to give FBR the names and addresses of customers whose accounts don’t align with the FBR’s algorithms. Personal and business financial information, including income and taxable turnover, will be made public by FBR.

If a person does not register with the sales tax department, the commissioner now has the authority to order their bank or credit union to freeze their accounts. Additionally, these officials have the authority to prevent the sale of real estate to anyone who has not filed their sales tax documents.

In addition, with the exception of Asaan accounts, banks will not be allowed to open or maintain accounts for non-filers, and the FBR will decide on withdrawal limitations.

These new regulations are intended to increase tax compliance and reduce tax evasion by requiring people and corporations to only engage in substantial financial transactions if they are in good standing with the tax authorities.