ISLAMABAD: The government may block bank accounts of non-filers and also decided to fix the amount of sales tax on the import of mobile phones replacing 18 percent sales tax and revise law on disallowance of 25 percent of sales promotion and advertising expenses under amended Finance Bill 2024.

Sources informed that the proposal of freezing bank accounts of non-filers was part of the original Finance Bill 2024, but the same was not passed.

In cases where non-filers are not responding to notices, the government may consider a proposal to block bank accounts of non-filers till they appear on the Active Taxpayers List (ATL). The non-filers would be able to continue to deposit money in banks, but cannot withdraw the amount till they become filers and their names appear on the ATL.

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The FBR will issue the income tax general order (ITGO) of names of non-filers for blocking their bank accounts if the proposal has been made part of the amended finance Bill 2024.

The amended Finance Bill 2024 would replace the 18 percent sales tax on the import of mobile phones with a fixed amount of sales tax depending on the brands of the imported mobile phones.

In budget 2024-25, the government has disallowed 25 percent of sales promotion and advertising expenses under the royalty arrangement.

Now, through amendments in the Finance Bill 2024, the government is considering three options.

Firstly, the FBR may reduce the rate from 25 to 20 percent with fulfilment of laid down conditions.

Secondly, the FBR may restore the original status of law prior to Finance Bill 2024. In this case, the FBR will be granted rules making powers to deal with such cases.

Thirdly, the government may allow a certain percentage of sales promotion or advertising expenses.

Copyright Business Recorder, 2024