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ISLAMABAD: The National Assembly Standing Committee on Finance and Revenue has deferred new Section 114C (restriction on economic transactions of non-filers) of Tax Laws (Amendment) Bill, 2024 till the Federal Board of Revenue (FBR) demonstrates necessary technological changes in its online systems.

This important development took place during the meeting of National Assembly Standing Committee on Finance held at the Parliament House here on Tuesday.

Bilal Azhar Kayani, Convener of the Sub-Committee of the Standing Committee on Finance and Revenue, presented the report of the sub-committee on “The Tax Laws (Amendment) Bill, 2024,” which was subsequently adopted by the committee.

Amended tax laws to tighten noose on non-filers

Minister of State for Finance, Ali Pervaiz Malik categorically conveyed to the committee that deferment of the new section (bar on transfer of immovable property) would not stop the FBR from the ongoing exercise of documenting wealthy people and non-filers of income tax returns. “We used non-filers as revenue spinners and never prosecuted them. The tax system cannot operate like that in our country”, he regretted.

The FBR has visibility of all kinds of immovable property transactions data and we would continue to take action against non-filers, he said.

“We will come back to the committee with the technological solution for implementing new section 114C (restriction on economic transactions of non-filers) of Tax Laws (Amendment) Bill, 2024,” Minister of State for Finance stated. The sub-committee, chaired by Bilal Azhar Kayani, recommended that the FBR should give a demonstration of the updated online system/application before further consideration of section 114C of Tax Laws (Amendment) Bill, 2024.

The FBR has committed to provide the demonstration to the committee. One option regarding the timing is to reconsider this section as part of the budget process in June 2025.

During the intervening period, the FBR may focus on preparing the necessary technological changes, ensuring maximum user-friendliness and facilitation for taxpayers/users, and mitigating any unintended consequences, sub-committee recommended.

MNA Mirza Ikhtiar Baig stated that people have fear that flight of capital would take place after restrictions on immovable property transactions in the country.

FBR Chairman Rashid Mahmood Langrial requested the committee to give two months’ period for development of technological tools for the implementation of this section 114C dealing with the restriction on economic transactions of certain persons.

The committee should also issue instructions to National Database and Registration Authority (NADRA), provincial excise departments and provincial land authorities to facilitate FBR in developing the new system, FBR Chairman added.

FBR Chairman said that transactions made by a non-resident person or a public company would not be covered under the Tax Laws (Amendment) Bill, 2024.

Syed Naveed Qamar Chairman of the committee endorsed the report submitted by sub-committee that the new section should be suspended till development of technological tools by the FBR.

The Chair emphasized that the Revenue Division should revisit Clause (5)(a) to provide greater clarity on the term “cash and equivalent assets.” He also directed the Revenue Division to finalize the updated online system/mobile app and present a demonstration to the committee within two months.

Sub-committee recommended in section 114C, in clause (1) (b) the word “Board” be replaced with the word “Federal Government”. The Federal Government may determine the value threshold for transactions affected by this restriction to ensure that property transactions conducted by common citizens and the lower- and middle-income class—particularly first-time property buyers or those purchasing their primary residential property—are not impacted.

As per the direction of the Sub-Committee, the FBR has shared aggregate data on property transaction values for FY 2023-24.

Copyright Business Recorder, 2025

Comments

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main Tariq mehmood Feb 13, 2025 12:32am
i am filer
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