Pakistan Government to Block Non-Filers’ Bank Accounts Following SIM Crackdown

In a significant move aimed at broadening the tax net, the Pakistani government has announced its intention to freeze the bank accounts of individuals who fail to file their tax returns. This measure is part of a broader strategy to enhance tax compliance and increase revenue.

The proposal to freeze non-filers’ bank accounts was initially included in the original Finance Bill 2024. Although this bill was not passed, the government has resurrected the plan and intends to incorporate it into the amended version of the bill, as reported by Business Recorder on Wednesday. This decision underscores the government’s commitment to enforcing stricter tax regulations.

Under the revised plan, if non-filers do not respond to official notices, the government will have the authority to block their bank accounts until they are listed on the Active Taxpayers List (ATL). While non-filers will still be permitted to deposit money into their accounts, they will be restricted from withdrawing funds until they comply with the tax filing requirements and are included in the ATL. This approach is designed to pressure non-filers into fulfilling their tax obligations and becoming active participants in the formal economy.

This initiative follows an earlier action by the Federal Board of Revenue (FBR), which began on May 11, targeting non-filers of tax returns by blocking their mobile phone SIM cards. The FBR initiated the process by blocking 506,671 mobile phone SIMs belonging to non-filers, a move that was sanctioned by the federal government in April. Telecom operators were instructed to send warning messages to the first batch of 5,000 non-filers, informing them of the imminent blocking of their mobile SIMs if they failed to file their tax returns. This initial step served as a precursor to more extensive enforcement actions aimed at ensuring tax compliance.

The government’s strategy of targeting both bank accounts and mobile phone SIMs reflects a comprehensive approach to tackling tax evasion. By cutting off access to essential services, the authorities aim to incentivize non-filers to regularize their tax status. The success of these measures will depend on effective implementation and the ability to address any challenges that arise during the enforcement process.

Overall, these initiatives highlight the Pakistani government’s determination to enhance its tax collection mechanisms and bring more individuals into the tax net. By leveraging both financial and technological tools, the government seeks to create a more compliant and transparent tax system, ultimately contributing to the country’s economic stability and growth.

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