Introduction
The Federal Board of Revenue (FBR) has intensified its efforts in 2025 to ensure compliance with income tax return filing requirements in Pakistan. Targeting high-net-worth individuals, senior government officials, executives, and non-filers, the FBR has rolled out aggressive enforcement measures under its statutory powers—backed by technological collaboration with telecom regulators and banks.
This article explores the key enforcement mechanisms being implemented by the FBR, their implications for taxpayers, and the broader goals of fostering a culture of compliance and sustainable economic development.
Targeted Compliance Drive
In line with the Finance Act 2024 and under the Income Tax Ordinance, 2001, the FBR launched a compliance crackdown on non-filers who:
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Have taxable income but do not file returns
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Own vehicles, property, or travel abroad but are not listed on the Active Taxpayers List (ATL)
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Occupy senior positions in public or private institutions
The FBR’s compliance campaigns now include senior bureaucrats, bank executives, real estate developers, corporate directors, and professionals earning income from business, salary, or capital gains. This follows the earlier success of similar enforcement drives focused on FBR’s own officials and tax practitioners.
Key Enforcement Measures Introduced
1. SIM Card Blocking for Non-Filers
In an unprecedented move, the FBR has begun blocking mobile phone SIMs of individuals who failed to file their income tax returns for Tax Year 2023 and are not on the ATL 2024.
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This action is implemented through an Income Tax General Order (ITGO) under Section 114B of the Income Tax Ordinance.
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The Pakistan Telecommunication Authority (PTA) and telecom operators (Jazz, Telenor, Zong, Ufone) are directed to disable SIMs linked to the CNICs of non-filers.
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The SIM will remain deactivated until the return is filed and FBR or the Commissioner Inland Revenue restores the taxpayer’s status.
This is considered a non-monetary but high-impact measure, designed to drive immediate compliance without resorting to fines or litigation.
2. Blocking of Bank Accounts and Withholding Penalties
FBR has also issued warnings that it may:
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Freeze bank accounts of persistent non-filers
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Impose enhanced withholding tax rates on non-compliant individuals
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Instruct NADRA and banks to withhold certain financial transactions
Under Section 165A and related laws, banks must share account holder data with FBR to identify discrepancies between declared income and actual financial activity.
3. Real-Time Data Matching and Cross-Verification
Using AI-based data analytics, FBR has improved its ability to detect non-compliant individuals by matching:
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Travel records (FIA)
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Utility bills exceeding PKR 1 million/year
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Property records (land registries, DHA, CDA)
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Foreign remittances and investment holdings
The system then auto-generates notices under Section 114(4) or Section 176, initiating proceedings for compulsory assessment and penalties.
Immediate Effects and Mandatory Compliance
Telecom operators must now provide compliance reports to FBR, ensuring transparency in the SIM deactivation process. If the taxpayer files a return and their name appears on the ATL:
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The blocked SIM can be reactivated
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The taxpayer regains eligibility for reduced withholding tax rates
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They can participate in banking, travel, and government tenders without restriction
This measure is expected to push hundreds of thousands of individuals to file returns in 2025.
Broader Implications for Economic Development
The FBR’s enforcement strategy isn’t merely punitive—it’s part of a national fiscal strategy to:
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Broaden the tax base
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Enhance direct tax collections
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Reduce reliance on indirect taxes (e.g., GST, FED)
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Improve transparency in high-income and high-consumption sectors
By compelling wealthy and influential individuals to fulfill their tax responsibilities, the government can reallocate more funds to:
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Public infrastructure projects
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Health and education sectors
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Fiscal deficit reduction initiatives
Promoting Voluntary Compliance
In parallel with enforcement, the FBR is working to encourage voluntary compliance by:
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Launching awareness campaigns about ATL benefits
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Offering online filing tools via IRIS 2.0
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Simplifying return forms for salaried individuals and freelancers
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Collaborating with NADRA, PSEB, and banks to onboard new filers
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Offering reduced penalties and waivers under Section 182A for early compliance
The goal is to shift public perception of tax filing from a burden to a civic responsibility.
Conclusion
FBR’s recent enforcement actions, particularly the blocking of SIM cards for non-filers, reflect a zero-tolerance policy toward tax evasion in 2025. These measures send a strong message to Pakistan’s high-income earners and professionals that non-compliance will result in direct, personal inconvenience and loss of digital access.
At Sterling.pk, we advise individuals, professionals, and businesses on how to:
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File income tax returns accurately and on time
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Respond to FBR notices
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Restore ATL status and reactivate blocked services
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Navigate compliance with minimal financial and reputational risk
