FBR drafting new law to eliminate late filers, non-filers category

FBR is introducing mobile app for general public to declare income sources
An undated image of the FBR building. — Reuters
An undated image of the FBR building. — Reuters 

The Federal Board of Revenue (FBR) is drafting a new law aimed at abolishing the categories of “late-filers” and “non-filers” from the Income Tax Ordinance 2001. 

The decision was taken following the already challenged “late-filer” category in the Lahore High Court which was introduced through the Finance Act 2024. 

Citing sources, ProPakistani reported that the new draft bill is in process and will end the concepts of both non-filers and late-filers. 

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Under the new law, taxpayers must justify their income sources for financial transactions, and their family’s non-filer members, including wives, parents, and children under 25, will not be required to file tax returns for financial transactions.

FBR’s new law is expected to simplify transactions for the general public. Individuals will be allowed to purchase motorcycles and vehicles up to 1300cc without declaring income sources, while property transactions up to PKR 10 million will also be free from source declaration.

Moreover, disincentives will be introduced for non-compliant taxpayers, linking facilities like investments and bank account creation to tax return filing.

Additionally, FBR is also introducing a mobile app for the general public for the declaration of resources that would be acceptable to the tax department.

Now, a taxpayer would not be required to go to the concerned commissioner to take any certificate of exemption, but only fill the “sources” column within the mobile app. Moreover, disincentives will be introduced for non-compliant taxpayers, linking facilities like investments and bank account creation to tax return filing.

FBR’s new law is expected to be implemented in the coming months.