Islamabad, Pakistan – The government has included in its plans to abolish the non-filer category from the tax laws in order to increase revenue collection and reduce the burden on existing taxpayers. According to recent statements Finance Minister Muhammad Aurangzeb spoke with Voice of America said he intends to broaden the tax base by getting rid of an unfair advantage that non-filers currently enjoy.
He elaborated that Pakistan is one amongst the few countries of the world, maintaining a non-filer category. He explained that the present classification is archaic, as it furnishes unequal grounds for compliant taxpayers. Eliminating this classification will ensure all contribute to the economy as much as they can.
This decision of abolition of non-filer category fits into the ongoing efforts of the Federal Board of Revenue to enhance tax compliance. Even FBR Chairman Rashid Mahmood Langrial showed support for the measure by stating in public that the government was adamant on expanding the tax net and bringing non-filers within it.
To further push people into paying taxes and to discourage them from not filing their taxes, the government has planned to impose curbs on those who fail to pay their taxes. This may include a curb on the financial transactions, traveling, and engaging in other activities. The finance minister stated that the government possesses knowledge about the lifestyles of people, and this would be used to identify the potential non-filers and evaders of taxes.
Thus, abolition of the non-filer category is expected to have a strong impact upon the economy of the country. This increases the tax base, reduces reliance upon a small group of taxpayers, generates additional revenue needed to fund and develop essential public services, and brings about a reduction in fiscal deficit.
While admitting that the shift to an entirely compliant tax system might come with its own set of difficulties, the government is bent on the reforms. The finance minister termed the long-term benefits of a broader tax base to outweigh any short-term costs.
Abolition of the non-filer category is, therefore, a very significant move for the government to further itself in pursuit of the betterment of tax compliance and the building of a stronger economy. This would expand the tax base and disperse the burden to existing taxpayers, thereby making the fiscal system both more just and sustainable.
Also Read:
- Filer vs. Non-Filer vs. Late Filer Status Explained
- Common Income Tax Return Mistakes to Avoid in Pakistan
- How to Make NTN in 2023 for Salary and Business
