ISLAMABAD: In a significant step towards enforcing tax compliance in high-value transactions, the Federal Board of Revenue (FBR) has integrated a new “Certificate of Eligibility” button into its online tax portal, IRIS. This digital feature is a direct implementation of provisions within the Finance Bill 2025-26, which mandate that only “eligible persons” will be permitted to purchase vehicles and property above a specified threshold.
The addition of this button to the FBR’s user-friendly IRIS dashboard (as seen in recent online screenshots) signals the tax authority’s readiness to streamline the verification process for taxpayers, ensuring adherence to the new regulations for major asset acquisitions.
Who is an “Eligible Person” under Finance Bill 2025?
The Finance Bill 2025-26 introduces a crucial amendment to the Income Tax Ordinance, 2001, specifically through the proposed Section 114C. This section precisely defines who qualifies as an “eligible person” for these significant transactions. To be deemed eligible, an individual or entity must meet two key criteria:
Tax Return Filing: They must have filed their income tax return for the tax year immediately preceding the tax year in which the transaction (e.g., property or vehicle purchase) is taking place. This ensures a consistent record of tax compliance.
Declared Resources: They must have declared sufficient resources in their wealth statement (for individuals) or financial statement (for companies and Associations of Persons) that adequately justify the value of the intended transaction. This aims to counter the use of undeclared wealth for asset acquisition.
This new legal framework is a direct measure to combat tax evasion, particularly in the real estate and automotive sectors, by creating a mandatory link between declared income/assets and the ability to undertake substantial purchases.
The Role of the Digital Certificate
The newly introduced “Certificate of Eligibility” button on the IRIS portal will allow compliant taxpayers to instantly obtain a digital certificate confirming their eligible status. This certificate is expected to become a mandatory document for registration authorities, such as excise and taxation departments for vehicles, and relevant property registration offices for real estate. Its verifiability will simplify the process for legitimate buyers while acting as a barrier for those attempting to purchase assets with undeclared funds.
For individuals or entities deemed “ineligible” – those who have not met the criteria of timely tax filing or sufficient resource declaration – these new rules will restrict their ability to purchase vehicles and property above specific values. The exact thresholds for these transactions will be officially notified by the federal government at a later date.
FBR’s Ongoing Digital Transformation
The integration of the “Certificate of Eligibility” feature is a testament to the FBR’s persistent drive towards a comprehensive digital transformation of Pakistan’s tax system. By leveraging technology, the FBR aims to enhance transparency across financial transactions, deter the proliferation of undeclared wealth, and ultimately broaden the national tax base, contributing to increased state revenue. This digital enforcement mechanism is expected to lead to greater efficiency and reduce discretionary human intervention, making compliance more straightforward for active taxpayers while tightening the noose on the undocumented economy.
