In a recent move by the Federal Board of Revenue (FBR), the category of non-filers is set to be eliminated as part of a new initiative aimed at improving tax compliance in Pakistan, according to a news update from September 25. These changes are expected to significantly impact the real estate market and other sectors.

The FBR, in collaboration with the law ministry, is working on drafting an ordinance to implement these reforms. Under the new regulations, five major restrictions will be imposed on non-filers, limiting their ability to:

Purchase property

Acquire vehicles

Travel internationally (except for religious purposes)

Open current bank accounts

Invest in mutual funds

This initiative, which has the approval of the Prime Minister, will utilize advanced machine learning and algorithms to identify non-filers more effectively. The aim is to monitor individuals whose income does not align with their financial transactions, ensuring greater accountability and transparency.

FBR Chairman Rashid Mehmood pointed out that traditional methods of collecting taxes from non-filers have been largely ineffective, with only PKR 25 billion collected last year through various fees. He emphasized the importance of automation in the tax process and noted that while many industrialists support these reforms, the continued lack of taxation in the agriculture sector could impact the overall tax-to-GDP ratio.

For property buyers and investors, these reforms will bring significant changes. The era of paying nominal fees to bypass tax obligations on property transactions is coming to an end. As these new restrictions take hold, it will be crucial for individuals and businesses to ensure they are fully tax-compliant to avoid facing limitations on property purchases and other financial activities.

At Dreams Marketing, we believe these changes will create a more regulated and transparent real estate market, benefiting both investors and the economy. Stay tuned to our blog for further updates on how these reforms could affect your property investments in Pakistan.