The government of Pakistan has introduced a major change under the Finance Act 2025 to crack down on tax evasion. Starting July 1, anyone who has not filed their income tax return (non-filers) will no longer be allowed to book, purchase, or register any car worth more than Rs. 7 million.
This rule now applies to both locally manufactured vehicles and imported ones, as long as the total value (including all taxes and duties) exceeds Rs. 7 million. It is part of Section 114C of the Income Tax Ordinance, added through the new Fifteenth Schedule, which gives legal force to the restriction.
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A non-filer is defined as someone who hasn’t submitted their income tax return for the previous year or who cannot show enough income or assets to support such an expensive purchase. This law also blocks anyone from using family members or others as fronts for such transactions if they are also non-filers.
- The restriction will be enforced at every stage:
- Car dealers will reject bookings from non-filers
- Registration will be denied by Excise departments
- Banks may refuse to process related payments
This move is part of a larger effort to bring high-income earners into the formal tax system. Simply having money is no longer enough — buyers must prove their financial strength through official tax records. Without filing returns, owning a luxury car over Rs. 7 million is now off the table.
