Pakistan govt to temporarily suspend bank accounts of tax evaders from July 1

Under the newly amended Finance Bill 2025–26, individuals or entities involved in taxable transactions without registering for sales tax may now face temporary suspension of their bank accounts—initially limited to a period of three working days—starting July 1, 2025.

This provision, introduced through Section 14AC of the Sales Tax Act, reflects a more balanced enforcement strategy aimed at encouraging voluntary compliance rather than immediately imposing harsh penalties.

According to the revised legislation, if the Federal Board of Revenue (FBR) has credible grounds to believe that someone is conducting taxable supplies without proper registration, the relevant Commissioner will issue three formal notices to the concerned party.

Should the individual or entity fail to comply with registration requirements after these opportunities, the Commissioner may then instruct banks and financial institutions in writing to temporarily suspend access to the person’s bank account for a three-day period.

Read more: Non-filers likely to be allowed to buy properties worth up to Rs10 million

The law also permits this suspension to be repeated up to two additional times, with each subsequent action separated by a one-week interval, provided non-compliance continues.

This approach underscores the government’s efforts to widen the tax base through a graduated enforcement model that offers due process.

It also provides a clear legal pathway for the FBR to act, even in the presence of conflicting laws.

The measure is part of broader reforms aimed at strengthening tax administration while maintaining fairness and procedural transparency.