In a major policy shift, the Federal Board of Revenue (FBR) will have the authority to temporarily suspend bank accounts of unregistered sales tax evaders for a limited period of three days, starting July 1, 2025, under the amended Finance Bill 2025-26.
The revised bill relaxes existing sales tax regulations concerning unregistered individuals involved in the supply of taxable goods without obtaining proper sales tax registration. These measures aim to bring more individuals and businesses into the tax net while ensuring fair notice and procedure.
According to the updated Section 14AC (Bar on Operations of Bank Accounts), the FBR can suspend bank accounts of unregistered sales tax evaders only after providing three separate opportunities to obtain sales tax registration. If the individual fails to comply, the Commissioner will be empowered to issue a written order to banking companies, scheduled banks, and other financial institutions to suspend the operations of the person’s bank account for three working days.
The suspension is not indefinite. The Commissioner may repeat the three-day suspension two more times, with each occurrence spaced one week apart. This staged approach is designed to compel registration while avoiding prolonged disruption to banking activities.
The amendment is part of broader efforts by the FBR to simplify enforcement mechanisms while still maintaining pressure on non-compliant taxpayers. By limiting the initial suspension to three days and mandating clear communication and procedural fairness, the FBR hopes to incentivize voluntary registration under the sales tax regime.
This new framework will take effect from July 1, 2025, and reflects a balanced approach between enforcement and taxpayer facilitation.