Islamabad: The Federal Board of Revenue (FBR) has announced plans to freeze the bank accounts of businesses and individuals operating outside the sales tax net in the upcoming 2025–26 fiscal year. This was revealed by FBR Chairman Rashid Mahmood Langrial during a session of the National Assembly’s Standing Committee on Finance on Friday.
Presided over by MNA Syed Naveed Qamar, the committee convened to review FBR’s compliance measures aimed at expanding sales tax registration. Langrial emphasised that the move would begin with the issuance of notices to unregistered entities. Those failing to register within the given timeframe would face account freezes. However, the FBR has committed to restoring access within 48 hours once registration is completed.
FBR officials noted that many income tax filers—particularly large industrial units—are still not registered for sales tax. Karachi-based factories with multiple industrial meters were cited as examples of significant unregistered sales activities that have gone undetected.
During discussions, committee member Usman Ahmed Mela expressed concerns over potential harsh penalties, calling sealing properties “too harsh.” Langrial reassured legislators that enforcement would primarily target major manufacturers, explicitly excluding small traders and cottage industries.
Committee Chair Syed Naveed Qamar raised concerns about the escalation in enforcement tactics. “First you cut their utilities, and now you’re freezing their bank accounts,” he observed. Additional concerns were voiced by Mirza Ikhtiar Baig, who argued for raising the registration threshold from PKR 8 million to PKR 10 million to align with inflation and protect smaller businesses. Langrial welcomed the idea, acknowledging that approximately two-thirds of manufacturing units remain unregistered.
To foster voluntary compliance, the FBR has proposed offering a six-month facilitation period for new registrants. During this window, businesses would be exempt from sales tax charges, allowing them time to transition into the formal tax system without immediate financial obligations.
These measures align with Pakistan’s broader tax reform agenda and its commitments under the IMF programme to increase documentation, expand the tax base, and close revenue gaps.
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