Non-Filers to Face Restrictions on Vehicle, Property Purchases Under New Budget

Advance tax on cash withdrawals by non-filers raised from 0.6% to 1%
The Federal Budget 2025–26, unveiled on Tuesday, introduces stringent measures targeting non-filers as part of a broader strategy to expand Pakistan’s tax base and promote economic documentation.

Finance Minister Muhammad Aurangzeb announced an increase in the advance tax on cash withdrawals by non-filers from 0.6% to 1%, signaling the government’s intent to discourage unregulated financial transactions.

More significantly, the budget proposes barring non-filers from purchasing vehicles and immovable property, as well as from investing in securities or mutual funds. The move aims to eliminate the financial privileges currently available to those outside the formal tax system.

The finance minister emphasized that only taxpayers who file returns and submit wealth statements will be allowed to participate in key financial activities, including the opening of bank accounts — a right that non-filers may lose under the new regulations.

These proposals represent some of the most rigorous attempts yet to compel compliance and increase fiscal transparency by integrating more citizens into the formal economy.

The government hopes these measures will curb the shadow economy, enhance tax collection, and improve economic governance.