FBR’s Zero-Tolerance Approach to Non-Compliance

Tax Laws (Amendment) Bill 2024 empowers the Chief Commissioner to take the following coercive actions against individuals or entities that fail to register with FBR:

1. Sealing Business Premises: The Chief Commissioner can close down the premises of non-compliant businesses, effectively halting their operations.
2. Seizure of Movable Property: Non-registrants risk having their movable assets confiscated by the authorities.
3. Appointment of a Receiver: A receiver can be appointed to manage the taxable activities of non-registered persons, ensuring government dues are protected and recovered.

Process and Safeguards

To ensure transparency and fairness, specific steps must be followed before any coercive action is undertaken:

Issuance of Public Notice: A public notice specifying the date of action (sealing premises, seizing property, or appointing a receiver) must be issued. This allows the affected party to prepare or comply before the enforcement date.

Opportunity for Hearing:

• • A committee, including the Chief Commissioner, the concerned Commissioner, and a representative from Chambers of Commerce or Trade Bodies, must provide an opportunity for the affected individual to be heard in an open court.

Public Disclosure:

• • The decision to take coercive action must be made public via placement on the Federal Board of Revenue’s (FBR) website and publication in newspapers.

These measures aim to ensure that actions are not arbitrary and that non-compliant individuals have an opportunity to explain their position.

Removal of Restrictions Upon Registration

Upon registration, the following steps are taken to restore normalcy for the affected individual or entity:

1. The Chief Commissioner is required to issue an order to remove the receiver or other restrictions within two working days of registration.
2. This expedited restoration of rights is designed to encourage voluntary compliance and immediate resolution.

Right to Appeal

Anyone aggrieved by the actions taken under Section 14AE can:

1. File a representation with the FBR within 30 days of receiving the decision or order.
2. Ensure that their grievances are addressed promptly by the higher authorities.

Implementation Timeline

The provisions under this section will come into force on a date notified by the FBR in the official Gazette. This allows sufficient time for businesses and individuals to prepare for compliance before enforcement begins.

Implications for Non-Registrants

These amendments signify a stricter stance by the government to curb tax evasion and ensure compliance. Businesses and individuals must now weigh the risks of non-registration against the substantial consequences outlined. The new measures are expected to:

1. Improve tax compliance and broaden the tax base.
2. Deter willful non-compliance by introducing clear and enforceable penalties.
3. Promote transparency and fairness through structured safeguards and appeals mechanisms.

What You Should Do

To avoid these coercive actions:

1. Register promptly if you are eligible.
2. Maintain accurate records of taxable activities to ensure smooth operations.
3. Seek professional advice to navigate compliance processes and understand your rights.

The government’s focus on automation, transparency, and enforcement signals a transformative shift in tax administration. Compliance is no longer optional but a necessity for individuals and businesses alike.