Pakistan to abolish ‘non-filer’ status, impose strict penalties on tax evaders: Aurangzeb

Non-filers will face significant restrictions that will impact their daily activities, finance minister tells VOA

ISLAMABAD:

Finance Minister Senator Mohammad Aurangzeb has announced that the government will eliminate the term “non-filers” and impose strict penalties on those who fail to declare their income. These individuals will face significant restrictions that will impact their daily activities.

In an interview with VOA on Thursday, the minister stated that the government has gathered extensive data on non-filers, including their lifestyles, vehicle ownership, and international travel. "We are now at a point where we cannot afford leniency. Those who hide their income and evade taxes will be restricted from many essential services," Aurangzeb said.

He highlighted plans to reduce the tax burden on salaried individuals, while expanding the tax net to cover sectors like retail, wholesale, agriculture, and real estate. "We aim to ease the load on the working class while ensuring that previously untaxed sectors contribute their fair share," he explained.

When asked about the IMF’s concerns regarding debt repayment, the finance minister said the government had presented a comprehensive economic reform plan. “We had no choice but to implement these reforms, and we will also bring all untaxed groups into the system.”

Aurangzeb noted that despite a 29% increase in tax revenues last year, the tax-to-GDP ratio remained at 9%, a figure too low to stabilise the economy. He credited support from China and Saudi Arabia for securing $7 billion in IMF loan and emphasised that large-scale reforms are necessary if Pakistan hopes to avoid future IMF programmes.

“Pakistan cannot sustain its economy on such a low tax-to-GDP ratio. If we wish this loan to be the last IMF programme, we have to bring large-scale reforms for long-term economic stability,” he added.