The Federal Board of Revenue (FBR) will now share income tax return data with banks as part of a new provision introduced in the Tax Laws (Amendment) Bill 2024. This change allows the FBR to compare tax return information with banking details to identify discrepancies.
The bill, introduced in the National Assembly on Wednesday, introduces two categories of individuals: “eligible” and “ineligible” persons. Those who are ineligible (non-filers) will face restrictions on economic activities, such as purchasing motor vehicles, buying or selling property, trading securities, and opening or operating bank accounts. Additionally, ineligible persons will be banned from withdrawing cash from banks.
The bill also allows the exchange of tax and banking information for high-risk individuals between the FBR and banks. Under this provision, the FBR can share information about a person’s income, turnover, bank account numbers, wealth statements, and financial statements with scheduled banks.
Banks are required to report discrepancies between the data provided by the FBR and their own records, including account details of individuals whose banking information doesn’t match the FBR’s data.
An “eligible person” is someone who has filed an income tax return for the previous year and has the necessary financial resources to support the transactions they make. In contrast, an “ineligible person” is someone who does not meet these criteria.
The bill grants powers to the Commissioner Inland Revenue to direct banks and other financial institutions to block accounts of individuals who fail to register for the Sales Tax Act. Similarly, property registration authorities can be directed to prevent the transfer of property by those who are not registered.
The bill also includes restrictions on economic transactions for ineligible persons, such as:
- Not allowing the purchase or registration of motor vehicles.
- Preventing the transfer of property exceeding certain values.
- Restricting the sale or purchase of securities, including mutual funds, by ineligible persons.
- Prohibiting the opening or maintenance of bank accounts, except for basic accounts like Asaan accounts.
- Imposing limits on cash withdrawals from bank accounts.
However, these restrictions do not apply to the purchase of vehicles like motorcycles or rickshaws, or vehicles with engine capacities up to 800cc.
