New tax law amendments allow non-filers to buy up to 800cc cars, motorcycles, tractors

ISLAMABAD: The National Assembly Standing Committee on Finance and Revenue has broadened the scope for non-filers, permitting them to purchase rickshaws, motorcycles, tractors, and cars with an engine capacity of up to 800cc.

This decision was made during the committee’s approval of a sub-committee report that recommends updates to the Tax Laws (Amendment) Bill, 2024, which aims to address concerns from stakeholders and enhance the tax system.

During a meeting led by MNA Naveed Qamar, the committee examined various sections of the tax amendment bill and agreed to finalise any outstanding provisions in the next session. MNA Bilal Azhar Kayani, who chairs the sub-committee on finance and revenue, presented the report, which received unanimous support.

The committee has approved several key changes, including the ability for non-filers to purchase tractors, mandatory reporting by banks for transactions exceeding an individual’s declared income, clearer definitions of “cash and equivalent assets” in Clause (5)(a) of the bill, and the finalization of the updated online system and mobile app of the Federal Board of Revenue (FBR), which is expected to include a demonstration within the next two months.

Bilal Azhar noted that the successful adoption of the report represents a significant advancement in refining the tax framework, highlighting the collaborative efforts of policymakers, experts, and stakeholders in bolstering the country’s financial and economic infrastructure.

Additionally, the committee postponed the amendments to the Federal Excise Act 2005 until the next meeting. The sub-committee suggested that the federal government should set the value threshold for transactions rather than the FBR to prevent adverse effects on property transactions, particularly for lower and middle-income citizens, including first-time buyers.

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The restrictions will take effect only once the federal government announces the value.

Furthermore, the definition of an eligible person has been clarified, expanding the definition of immediate family members to include parents, spouses, and dependent children.

The committee was informed that the FBR plans to install points of sale in all hotels in Islamabad and extend this service to other service providers in the federal capital.

Additionally, data regarding property purchases will be shared with the FBR by Nadra and provincial excise and land departments.

The committee also approved a proposal to hire new auditors and experts for the FBR, with strict measures in place to dismiss any auditors who leak taxpayer information.

FBR Chairman Rashid Mahmood Langrial stated that due to limited capacity, not all notices can be issued, but the amended tax law aims to broaden the tax base. He said banks will have a new obligation to report business transactions and those of Associations of Persons (AOP) under the revised measures.

However, MNA Dr. Nafisa Shah expressed concerns that the amended tax law could facilitate capital flight, which she believes may negatively impact the economy.