Monday, June 16 2025

Industrialists should be held to the same standard of tax compliance as salaried persons

FBR chief

In a groundbreaking revelation to the National Assembly Standing Committee on Finance, Federal Board of Revenue (FBR) Chairman Rashid Langrial has demanded that industrialists be held to the same stringent tax compliance standards as salaried individuals.

Langrial exposed a startling disparity in tax compliance among Pakistan’s industrial sector, noting that out of 300,000 industrial connections, a mere 30,000 are registered with the FBR. This indicates a vast number of large-scale operations evading tax obligations while consuming industrial electricity.

Highlighting the stark contrast, Langrial remarked,

Individuals earning a monthly salary of PKR 50,000 are taxed, yet industrialists with an annual income of PKR 25 million continue to bypass the system.

Crackdown on Non-Compliant Industrial Units

The FBR is pushing for new powers to suspend the bank accounts of non-compliant industrial units. This measure aims to compel tax registration and compliance, significantly impacting the operational capabilities of defaulters.

Langrial specified that the primary targets would be industrial units with monthly electricity bills amounting to PKR 100 million. These entities will receive formal notices, providing a 15-day window to register for sales tax. Following a hearing, they will have the right to appeal the suspension of their bank accounts.

Political Pushback and Concerns

The proposal has not been without controversy. Committee member Hina Rabbani Khar labelled the initiative as a “draconian law,” emphasizing the necessity for transparency and fair implementation. Concerns were also raised regarding the potential repercussions on salary payments for employees if industrialists’ bank accounts are frozen.

Critics argue that while the move aims to increase tax compliance, it should not hinder the financial stability of the workforce. “Accounts should remain open to ensure that salaries are paid,” stressed one committee member.

This bold move by the FBR reflects a growing demand for equity in the tax system, ensuring that industrial magnates contribute their fair share. As the government seeks to bolster its revenue streams, this initiative marks a significant step towards greater fiscal responsibility and fairness in Pakistan’s economic landscape.

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