In a bold move to tighten the noose around tax evaders, the federal government has proposed sweeping penalties and enforcement powers in the Finance Bill for the fiscal year 2025–26. The proposed measures target both individuals and institutions involved in tax fraud, aiming to significantly raise the cost of evasion in Pakistan.
According to the bill, those found guilty of committing tax fraud could face imprisonment of up to 10 years and fines reaching Rs10 million. In cases of severe fraud, both penalties may be imposed simultaneously. The government has also proposed a 100% fine on the evaded amount, effectively doubling the financial blow for offenders. Individuals who aid or abet tax fraud will face similar consequences—10 years in prison and fines up to Rs10 million—with the possibility of both punishments being applied concurrently.
The Finance Bill further empowers the Federal Board of Revenue (FBR), proposing that its officers be granted the powers of a civil court. This would allow them to arrest suspects during investigations without prior approval from a commissioner. Inquiry officers would have the authority to arrest company directors, chief executive officers (CEOs), and chief financial officers (CFOs) implicated in fraudulent tax practices. All arrested individuals must be presented before a special judge within 24 hours.
Online platforms and e-commerce services have not been spared. A fine of Rs50,000 is proposed for failing to issue e-bills, while those tampering with electronic invoices to evade taxes will be required to repay the evaded amount. E-commerce platforms that fail to submit monthly tax statements could face a fine of Rs500,000, which may increase to Rs1 million for repeat offenders.