Govt ends filer vs non-filer distinction in Budget 2025-26

Islamabad: The federal government has officially eliminated the distinction between tax filers and non-filers, a move that marks a significant shift in Pakistan’s taxation policy. Presenting the Rs17.573 trillion federal budget for FY 2025-26, Finance Minister Muhammad Aurangzeb announced that only individuals who file wealth statements will now be allowed to conduct major financial transactions.
This means that activities such as property purchases, vehicle registration, large-scale banking transactions, and high-value financial dealings will now be restricted to those who comply with wealth statement filing requirements — regardless of their previous filer or non-filer status.

Read: Budget 2025–26 brings major tax reliefs for real estate sector
At the same time, the withholding tax on cash withdrawals by non-filers has been increased from 0.6% to 1%, further tightening compliance.
The government has also outlined strict enforcement measures for unregistered businesses. These include:
• Freezing of bank accounts
• Ban on property transfers
• Sealing of business premises
• Confiscation of goods
However, an appeal mechanism has been included, allowing affected businesses to challenge enforcement actions within 30 days.
The announcement comes as part of broader reforms aimed at expanding the tax base and boosting revenues, with the FBR’s tax collection target set at Rs14.131 trillion — an 18.7% jump from the revised estimate of Rs11.9 trillion for the outgoing year.

Read: Govt slashes income tax rates for salaried class in Budget 2025–26
To further curb tax evasion, the finance minister revealed that 390,000 high-value non-filers have been identified through improved data integration, leading to Rs300 million in recoveries.
The decision to end filer vs non-filer discrimination is seen as a step toward horizontal equity in the tax system, placing equal responsibility on all individuals to declare their wealth and contribute taxes accordingly.