Islamabad: In a move to widen the tax base, the federal government has proposed strict new penalties for unregistered businesses under the Finance Bill 2025–26. The measures include suspending bank accounts and disconnecting electricity and gas connections of businesses that are not registered for sales tax.
The proposals were presented during a meeting of the National Assembly’s Standing Committee on Finance on Thursday. Chaired by MNA Syed Naveed Qamar, the session featured a detailed briefing from Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial.
Langrial informed the committee that under the proposed amendments, unregistered businesses would be issued notices before any action is taken. However, if they fail to comply, their bank accounts would be temporarily suspended. The accounts would be restored within two working days upon successful registration.
He further stated that unregistered Tier-1 retailers could face disconnection of their gas and electricity services. “Of the 300,000 industrial units operating in Pakistan, only about 30,000 to 35,000 are currently registered with the FBR,” Langrial said, highlighting the significant gap in compliance.
The FBR chairman also pointed out that a substantial number of businesses underreport their sales and production, even if they are registered. “Roughly one-third of manufacturers are not registered at all, and many of those that are tend to engage in under-filing,” he added.
Committee members expressed support for the underlying objective of enhancing tax compliance but stressed the need for procedural safeguards. Chairperson Qamar urged that the policy should not unintentionally penalise businesses that may fall through the cracks. The committee conditionally approved the proposal and directed the FBR to revise the draft law to include clear safeguards.
Langrial clarified that the proposed account suspensions would be temporary and that any permanent closures should be subject to the decision of a designated oversight committee.
Finance Minister Muhammad Aurangzeb, also present at the meeting, confirmed the government’s commitment to expanding the tax base without offering any further tax amnesty schemes. “That era is behind us,” he said. “The focus now is on improving compliance and bringing more individuals and businesses into the formal economy.”
These measures are part of Pakistan’s broader tax reforms aimed at fulfilling commitments under its programme with the International Monetary Fund (IMF).
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