Govt putting squeeze on e-commerce and the ‘non-compliant’

The federal government has proposed sweeping reforms to tighten tax compliance, including significantly higher penalties for non-compliance and stronger enforcement measures to target under-taxed and digitally active sectors. The changes, proposed in the Finance Bill 2025, aim to deter non-compliance, discourage cash-based transactions and enh­ance documentation of the economy. Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial said enforcement was the only viable option to boost revenue collection, rather than relying on new taxes. One of the key amendments is a tenfold increase in the penalty for failure to submit withholding tax statements — from Rs5,000 to Rs50,000. Authorities believe this will compel withholding agents to comply with deadlines and file statements within the due date.