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New Tax Law: FBR to Pre-Audit Sales, Limit Lavish Spending Over Income

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The Standing Committee on Finance and Revenue approved the Tax Laws Amendment Bill 2024 on Thursday. This bill allows the Federal Board of Revenue (FBR) to pre-audit all sales and restrict extravagant purchases that exceed a person’s declared income.

FBR Chairman Rashid Langrial explained that 95% of the population won’t be affected, as the changes target the top 5% of high earners who evade taxes. The amendments aim to reduce underreporting by requiring taxpayers to justify their income in relation to their assets and lifestyle. For example, purchases worth more than 130% of declared income will require declaring additional income or resources in tax returns.

People with extravagant lifestyles or large assets that don’t match their declared income will face stricter checks. Taxpayers must now disclose their income sources before making major purchases like cars, properties, or investments. The committee also approved pre-audits for high-value sales, including gold and foreign currency.

Additionally, cigarettes and beverages cannot be sold without tax stamps, stickers, or barcodes.

Finance Minister Muhammad Aurangzeb said Pakistan needs to raise its tax-to-GDP ratio to 13.5% within three years, with provinces contributing an additional 3%.

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