ISLAMABAD:The government has decided to abolish non-filers from the tax laws and gradually ban their 15 types of activities, as it has won rare support from Pakistan’s top industrialists for getting more revenues from existing filers and punishing non-compliant citizens.

The income tax returns data processed by the Federal Board of Revenue (FBR) disclosed that Pakistan’s middle-income group taxpayers were in fact 94% compliant compared to the 29% compliance ratio among the 1% richest Pakistanis.

The government believes that this necessitates further tightening the noose around the return filers.

An overwhelming majority of the country’s major industrialists, representatives of the corporate sector and the fast-moving consumer goods companies supported the government’s new tax plan that envisages fully capturing the filers and punishing the non-filers. They extended their support during a consultative round held at the FBR headquarters.

The government is going to abolish the category of non-filers and it would also disallow use of cheques for cash withdrawals beyond a certain threshold, FBR Chairman Rashid Langrial informed the participants.

Earlier, the plan was to only ban the purchase of assets by the non-filers. But now the government would delete the definitions of non-filers, and later abolish the schedule 10th from the Income Tax Ordinance.

The schedule 10th provides double withholding tax rates for the non-filers on undertaking various transactions compared to the standard rates. “The FBR has not used the data mines available to it, thus, it is now moving towards this new plan”, said Ali Pervaiz Malik, the minister of state for finance.

Gradually, 15 types of transactions by non-filers will be banned, including non-religious travel, said the FBR chairman. “You cannot create your own currency by issuing cheques as an alternative to cash, thus, Rs30 million annual limits on cash withdrawals are being proposed,” Langrial stated.

He added that the information would be shared with the banks through the SBP to discourage cash withdrawals through cheques. He further said that the government would soon start purchasing those properties that were declared below the market prices in the tax returns. The provision had been introduced by former prime ministerShahidKhaqanAbbasi in 2018 but it remained non-operational.

The 2013-18 government of the Pakistan Muslim League-Nawaz (PML-N) had introduced the category of the non-filers in the law in the hope of forcing the people to come in the net by charging higher taxes from them.