The Federal Board of Revenue (FBR) has been granted the authority to block current and savings accounts of non-filers, following the approval of a key clause in the Tax Laws Amendment Bill 2024 by the Senate Standing Committee on Finance and Revenue. The decision on Friday introduces stringent measures to ensure tax compliance and curb undeclared income.

The new law prohibits banks from opening or maintaining current or savings accounts, as well as investor portfolio securities accounts, for individuals who are non-filers. Additionally, the FBR will restrict cash withdrawals from bank accounts exceeding a certain threshold for such individuals.

To enforce these measures, the FBR and banking institutions will collaborate to develop a mechanism that limits banking transactions based on the declared income of individuals linked to their CNICs. The FBR will take action against individuals whose financial activity does not align with their declared income.

The legislation also introduces a new rule requiring individuals to declare additional income or resources in their tax returns if their purchases exceed 130 percent of their declared income. If the value of a major purchase, such as a vehicle, property, or investment in securities, surpasses this threshold, filers will need to justify the source of funds.

Furthermore, a pre-audit mechanism for high-value sales, including gold and foreign currency, has been approved to ensure transparency and compliance. Filers will now be required to declare their sources of income before making significant purchases.

In a related development, the committee has also mandated that cigarettes and beverages cannot be sold without tax stamps, stickers, or barcodes, as part of efforts to curb tax evasion in these industries.