Islamabad: In a significant move aimed at broadening the tax base and increasing revenue, the federal government is preparing to ban tax non-filers from purchasing property and vehicles as part of the upcoming Budget 2025–26. The initiative, part of Pakistan’s commitments under the ongoing loan negotiations with the International Monetary Fund (IMF), is expected to mark a turning point in the country’s efforts to enforce tax compliance.

Government sources reveal that these strict new restrictions will accompany the eventual elimination of the “non-filer” category altogether — a long-standing classification in Pakistan’s tax system that has been widely criticized for enabling large-scale tax evasion.

Read: FBR to tighten controls on non-filers via Finance Bill 2025-26

Under the new regime, non-filers will be barred from making major financial transactions, particularly the purchase of vehicles and real estate. These measures are aimed at compelling more individuals and businesses to register as tax filers and contribute to the national exchequer.

The move comes in response to IMF concerns about Pakistan’s sluggish tax reforms and vulnerability to external economic pressures, including global inflation trends, rising US tariffs, and regional tensions with neighboring India. In recent discussions, the IMF has insisted on more robust revenue measures, including timely adjustments in energy tariffs and the phasing out of tax exemptions for special economic zones.

In line with these expectations, the Federal Board of Revenue (FBR) is actively pursuing structural reforms aimed at improving tax enforcement. According to officials, the FBR is implementing a multi-pronged approach that includes:

Abolishing the non-filer category from the tax system.
Leveraging third-party data to identify and track tax defaulters.
Expanding the use of the Compliance Risk Management System (CRMS) in Islamabad, Lahore, and Karachi.
Extending CRMS to corporate tax units across the country.

Read: NA Committee approves relaxing restrictions on non-filers

FBR officials disclosed that while some efforts, such as the Tajir Dost Scheme aimed at bringing retailers into the tax net, fell short of expectations, recent policy adjustments have yielded results. For example, a 51% increase in tax filers among traders and wholesalers was recorded after a hike in withholding taxes on unregistered businesses.

The upcoming budget is expected to reflect a strong focus on documentation and compliance. According to insiders involved in the IMF-Pakistan budget discussions, it has been decided that “non-filers will no longer be allowed to operate with impunity.”

In addition to bans on high-value purchases, the government may consider integrating national databases and digital tools to track lifestyle patterns inconsistent with declared incomes — a move that aligns with international best practices.

The anticipated tax measures will not only help fulfill IMF loan conditions but also enhance domestic revenue mobilization, a critical goal for stabilizing the national economy. However, these reforms are likely to face resistance from segments of society accustomed to operating outside the formal tax system.

Read: Non-Filers barred from high-value banking transactions, property, share purchases: FBR

With the budget just weeks away, all eyes are now on how effectively the government will enforce these changes — and whether they will be sustained beyond IMF oversight.

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