FBR boss: Electricity and gas connections for non-taxpayers will be blocked

As Pakistan aims to increase its tax revenue in the 2024-25 budget, the chief of the Federal Board of Revenue (FBR) has announced that electricity and gas connections and SIM cards of taxpayers who do not file tax returns will be blocked.

In a recent development, the Senate Standing Committee on Finance and Revenue on Saturday approved a proposal to impose a foreign travel ban on taxpayers who fail to file tax returns. A number of decisions were taken during the meeting chaired by Saleem Mandviwalla.

FBR Chairman Zubair Tiwana informed the committee that action would be taken against those who fail to file tax returns under the Income Tax General Order (ITGO). However, exemptions would be granted to nationals for Hajj, Umrah, children, students and National Identity Card for Overseas Pakistanis (NICOP) holders.

He explained that people who do not file a tax return could face having their SIM cards, electricity and gas connections blocked and their businesses could be closed.

During the meeting, Pakistan Peoples Party (PPP) Senator Farooq H. Naek stressed that travel restrictions on non-income tax filers should be enforced similarly to the Exit Control List (ECL) restrictions.

Tiwana also mentioned that a higher withholding tax rate for non-taxpayers was approved. He added that the list of non-taxpayers included 500,000 people with an annual income of over 2 million.

These people had already submitted their income details with their tax returns in the past. Tiwana also pointed out that people who only file tax returns temporarily would have to pay additional taxes when purchasing vehicles, land and housing.

In addition, the Senate committee approved a proposal to cut salaries and increase taxes, as well as to impose a 75% withholding tax on mobile phone and internet bills of taxpayers who do not file tax returns.

Earlier this week, Finance Minister Muhammad Aurangzeb stressed the need to increase tax revenues and said the country could not survive with a tax rate of 9.5 percent of GDP.

“We need to include everyone in the tax net. Our goal is to put everyone on the list of active taxpayers,” the finance minister said on a television program on Wednesday.

“We need to eliminate the category of non-taxpayers in the country,” he added.

His statement came just hours after he presented the federal budget for the fiscal year 2024-25 in the National Assembly, which envisages total expenditure of Rp18.9 trillion.