Govt Redefines “Accomplice” to Curb Tax Evasion via Business Accounts

The federal government has introduced major legal reforms in the Finance Bill 2025-26, redefining the term “accomplice” or “facilitator” to tighten the grip on tax evasion activities. These changes aim to strengthen laws against those aiding or enabling tax fraud, especially through misuse of business bank accounts.

Under the new definition, anyone found using a business bank account to facilitate tax fraud will now be legally recognized as an “accomplice.” This includes individuals who knowingly assist or collaborate with others to commit tax evasion. The law extends further to cover indirect involvement, such as issuing fake invoices—even without the registered taxpayer’s knowledge.

These amendments empower tax authorities to take stern actions, including criminal prosecution and imprisonment, against facilitators of tax fraud. The bill also clarifies that anyone aiding or conspiring in tax-related crimes under the Sales Tax Act will be treated as a direct party to the offense.

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With these changes, the government aims to close legal loopholes that were previously exploited by individuals and businesses with the help of intermediaries to avoid taxes.