The federal government of Pakistan has introduced a set of financial and tax reforms aimed at tightening oversight of large transactions and boosting tax compliance. One of the key steps includes capping annual cash withdrawals from banks at Rs100 million. Officials believe this will help identify unusual financial activity and improve monitoring of high-value dealings.
In a related move, the Federal Board of Revenue (FBR) and scheduled banks have agreed to a formal data-sharing arrangement. This setup will allow both parties to exchange financial details, enabling the FBR to cross-check tax returns against actual financial records. Banks will be responsible for explaining or correcting any mismatches identified by tax officials. However, all shared data will be used strictly for taxation purposes.
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To encourage investments, amounts up to Rs50 million placed in mutual funds, securities, debt instruments, and money markets will be treated as new investments under the revised framework.
Efforts are also underway to combat the sale of counterfeit products. The FBR is considering extending enforcement authority to provincial officers of grade 16 or above in departments such as excise, taxation, and revenue.
The crackdown extends into the digital sector as well. The FBR plans to collect taxes on online earnings, including revenue from social media advertisements. Individuals or companies failing to declare such earnings could face penalties of Rs1 million. Additionally, if a foreign digital platform avoids tax payments after 120 days of operations in Pakistan, local payments to it may be blocked by the tax commissioner.
