In a significant policy shift aimed at broadening the tax base, the federal government has granted sweeping powers to the Federal Board of Revenue (FBR) to act against non-filers. Under the newly approved Finance Bill 2025-26, effective from July 1, the FBR will be authorized to forcibly register eligible taxpayers and freeze their bank accounts for non-compliance.

According to the amendments, any person liable to register under the Sales Tax Act who fails to do so voluntarily can now be registered by an authorized officer or Inland Revenue Commissioner after a formal inquiry. Clauses 14AC and 14AD, newly inserted into the legislation, explicitly target deliberate non-registration and evasion.

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Clause 14AC empowers tax officials to freeze bank accounts of unregistered individuals through a written order, effectively forcing compliance. The freeze will remain in effect until the individual completes the registration process, a move the government claims is essential for enhancing tax documentation and enforcement.

The Senate Standing Committee on Finance, chaired by Senator Saleem Mandviwalla, also supported related proposals to further restrict non-filers. The committee approved raising the property purchase cap for non-filers to 500% of declared assets, significantly up from the FBR s original 130% recommendation.

Finance Minister Muhammad Aurangzeb emphasized the government s intent to tighten the noose on tax evaders, stating that last year’s penalties for non-filers have already been increased. He reaffirmed the state’s commitment to bringing untaxed segments into the formal economy.

Additionally, the FBR suggested barring non-filers from purchasing property and vehicles in the upcoming budget. With these aggressive measures, the government aims to reduce fiscal leakages, increase revenue collection, and reinforce a culture of compliance among high-income earners operating outside the tax net.