The New Tax Bill 2024, introduced by Finance Minister Muhammad Aurangzeb, was presented in the National Assembly. The bill proposes granting tax authorities extensive powers to enforce compliance with tax laws.
These measures include prohibiting non-compliant individuals from opening bank accounts, restricting financial activities, and disallowing the purchase of vehicles over 800cc. Additionally, the legislation includes provisions to seal unregistered businesses.
Key Features of the New Tax Bill 2024
The proposed Tax Laws (Amendment) Act 2024 seeks to amend several tax-related laws, including the Sales Tax Act 1990, ICT (Tax on Services) Ordinance 2001, and Income Tax Ordinance 2001. Among the key changes, the terms “filers,” “non-filers,” and “late filers” will be replaced with “eligible person” and “ineligible person.”
An eligible person is defined as someone who has filed their most recent income tax return and declared sufficient resources in wealth statements (for individuals) or financial statements (for companies or associations).
Immediate family members—such as parents, spouses, children under 25 years, unmarried daughters, widowed/divorced women, and children with disabilities—are included in the definition of eligible persons.
Restrictions and Financial Transactions
The New Tax Bill 2024 outlines significant restrictions on economic transactions for ineligible persons. These measures include:
- Prohibiting manufacturers and registering authorities from processing applications for vehicles for ineligible individuals.
- Restricting the registration, recording, or transfer of immovable property exceeding values notified by the Federal Board of Revenue (FBR).
- Barring the sale of securities, mutual fund units, and debt securities to ineligible persons.
Banks will be required to restrict transactions by ineligible individuals, including opening new accounts and withdrawals beyond FBR-notified limits. High-risk individuals engaging in financial activities exceeding their declared resources will also be flagged and reported.
Additionally, the FBR plans to install point-of-sale (POS) devices in Islamabad Capital Territory to collect sales tax on taxable services, extending this system to retail shops.
Penalties and Exemptions
Tax commissioners will be empowered to seal business premises, seize assets, and suspend bank accounts of businesses that fail to register for sales tax. These measures will be reversed within two days of achieving compliance, and appeals can be filed within 30 days to the Chief Commissioner of FBR’s Inland Revenue wing.
The bill imposes fines for selling goods without proper tax stamps, stickers, or barcodes. To curb misuse of input tax adjustments, an automated risk management system will flag suspicious claims.
Despite the strict measures, the bill includes exemptions for transactions involving rickshaws, motorcycle rickshaws, tractors, and small vehicles with engine capacities up to 800cc. Loans, inheritance transactions, and remittances disclosed in tax returns are also exempt. Non-residents and public companies remain outside the scope of these restrictions.
Broader Implications
The New Tax Bill 2024 aims to enhance compliance, streamline tax collection, and reduce evasion. However, concerns remain regarding the extent of powers granted to tax authorities and the potential impact on small businesses and individual taxpayers, particularly women. The inclusion of exemptions and appeals mechanisms provides some relief, ensuring fairness while maintaining robust enforcement.
The Income Tax Salary Slabs 2024-25 apply to residents’ global income, while non-residents are taxed only on Pakistan-sourced income. For non-residents, salary earned from employment exercised in Pakistan is taxable, irrespective of payment location. These principles remain central to the Income Tax Salary Slabs 2024-25 framework.
