Pakistan’s Federal Board of Revenue (FBR) will freeze the bank accounts of non-filers in FY2025- 26 to enforce sales tax registration and target unregistered factories.
During a meeting of the National Assembly Standing Committee on Finance, chaired by Syed Naveed Qamar, FBR Chairman Rashid Mahmood Langrial announced that formal notices will be issued to non-registered entities. If these entities fail to comply, their bank accounts will be frozen, although they can be restored within 48 hours of registration.
Langrial pointed out that many businesses, especially in Karachi, operate unregistered factories that generate billions in untaxed sales and often relocate to avoid detection.
Committee member Usman Ahmed Mela criticised the practice of property sealing, describing it as excessive. Naveed Qamar shared this concern and questioned the use of aggressive tactics such as utility disconnections. In response, Langrial clarified that these measures target large-scale manufacturers rather than small retailers.
Read: Pakistan Proposes 9.5% Withholding Tax on Non-Filers for High-Value Property Sales
Mirza Ikhtiar Baig suggested raising the sales tax registration threshold from Rs8 million to Rs10 million to reflect better inflation, a proposal Langrial accepted. Additionally, new registrants will be granted a six-month grace period during which no sales tax collection will occur.
According to Langrial, the FBR’s crackdown aims to expand the tax base, as two-thirds of manufacturing units remain unregistered. The policy also seeks to reduce tax evasion by enforcing compliance and aligning with the IMF benchmarks. However, critics argue that small businesses require protection from excessively strict measures.
