Written by Hamza Shahnawaz in Budget 2026-27, Taxation Finance Act 2026 strengthens KPRA’s recovery powers and makes bank-wide compliance with recovery notices mandatory` PESHAWAR: The Government of Khyber Pakhtunkhwa (KP) has strengthened its tax recovery framework by introducing tougher penalties for bank officials who obstruct the recovery of provincial sales tax under the Khyber Pakhtunkhwa Finance Act, 2026. The new legislation amends Section 74 of the Khyber Pakhtunkhwa Sales Tax on Services Act, enhancing the recovery powers of the Khyber Pakhtunkhwa Revenue Authority (KPRA), particularly in relation to the attachment of taxpayers’ bank accounts. Bank-wide compliance made mandatory Under the amended provisions, any recovery notice issued by the KPRA to a bank operating in Khyber Pakhtunkhwa will be binding on the entire banking institution. Banks will no longer be permitted to refuse or delay compliance on the grounds that the relevant taxpayer’s account is maintained at a branch located outside the province. The amendment is intended to eliminate administrative hurdles that previously slowed tax recovery when taxpayers maintained accounts in branches beyond Khyber Pakhtunkhwa. Stricter penalties for non-compliance The Finance Act, 2026 also introduces tougher sanctions for bank officials who fail to comply with valid recovery notices or deliberately obstruct the recovery process. Under the revised law, any bank official who refuses to comply with a lawful recovery notice or is found to have…