FBR to initiate bank account freezing of non-filers in FY26

June 21, 2025 (MLN): The Federal Board of Revenue (FBR) is all set to freeze bank accounts of businesses and individuals who remain outside the sales tax net in the upcoming fiscal year 2025–26, FBR Chairman Rashid Mahmood Langrial informed the National Assembly’s Standing Committee on Finance on Friday.

The committee, led by Syed Naveed Qamar, convened to assess the tax authority’s enforcement measures to broaden the sales tax base.

Langrial stated that notices will first be issued to unregistered entities, and those failing to comply will face account freezing. However, he clarified that accounts would be restored within 48 hours of completing the registration process.

FBR officials highlighted many income tax filers, especially industrial units, who have yet to register for sales tax. In Karachi alone, several factories with multiple industrial meters reportedly conduct large-scale operations without being registered, leading to billions in unreported sales.

While Committee member Usman Ahmed Mela objected to the sealing of properties, calling it too harsh, Langrial clarified that enforcement will remain focused on large manufacturers and will exclude small traders and cottage industries.

Naveed Qamar criticized the FBR’s increasing pressure tactics, noting, “First you cut their utilities, and now you’re freezing their bank accounts.”

FBR representatives further shared that a common tactic among tax evaders in Karachi involves frequently relocating operations, running sizeable manufacturing setups on single plots before moving to new locations to avoid detection.

During the meeting, committee member Mirza Ikhtiar Baig proposed increasing the sales tax registration threshold from Rs8 million to Rs10 million to reflect current inflation levels.

He stressed that smaller traders should not be subject to such stringent enforcement. Langrial supported the recommendation and revealed that nearly 66% of manufacturing units still operate outside the tax net.

To support voluntary compliance, the FBR chairman offered a six-month facilitation period for new registrants during which no sales tax will be collected, allowing businesses time to integrate into the formal system without immediate financial burden.

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