The Pakistani government is taking steps to address the concerns of individuals who are not required to file income tax returns. These measures aim to simplify the tax filing process and prevent the unjust penalization of citizens who fall below the tax threshold or have specific exemptions.
Key Changes:
- Family Category: A new family category will be introduced to exempt dependents from filing tax returns. This will benefit individuals such as housewives and children under the age of 25.
- Income Threshold: Individuals earning less than Rs600,000 per year will no longer be required to file tax returns.
- SIM Blocking and Travel Bans: The government plans to abolish penalties such as SIM blocking and travel bans for individuals who are not required to file tax returns.
Overseas Pakistanis Exempt from Filing:
Individuals living abroad will be exempt from filing tax returns and will be allowed to remain on the Active Taxpayers List (ATL).
Addressing Concerns:
The initiative aims to address the rising number of nil-return filings, which have surpassed 2.5 million in the tax year 2023. The government recognizes that many individuals are not required to file returns due to their income level or circumstances.
Key Measures:
- Reference Values: The FBR will establish reference values for families eligible to purchase real estate, vehicles, and other assets. These values will be based on the declared income of the primary filer in the family.
- Restrictions on Non-Filers: Non-filers will face restrictions on opening current accounts and making large transactions. They will be limited to using simplified “Asaan Accounts” for basic transactions.
- Travel Restrictions: The government may introduce travel restrictions for non-filers, especially to developed countries. However, exemptions will be made for religious pilgrimages and visits to religious sites.
- Scrutiny of Financial Transactions: The FBR may scrutinize financial transactions linked to CNICs of non-filers to identify undeclared income.
Benefits for Taxpayers:
These reforms aim to create a more equitable tax system and reduce the burden on individuals who are not required to file tax returns. By simplifying the filing process and eliminating unnecessary penalties, the government hopes to increase tax compliance and promote economic growth.
