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*Victory! Women Entrepreneurs can finally now avail a 25% tax concession in their income tax returns from Tax Year 2025 ...
01/03/2026

*Victory! Women Entrepreneurs can finally now avail a 25% tax concession in their income tax returns from Tax Year 2025 onwards.*

*Following the decision of the Federal Tax Ombudsman on my Complaint No. 18986/PWR/IT/2025 - Nida Khan, the Federal Board of Revenue has formally implemented the order. The Director General IT & Digital Transformation, Inland Revenue has now officially notified the deployment of a dedicated tab in the income tax return for Clause 19, Part III, Second Schedule of the Income Tax Ordinance, 2001.*

*As a result, women entrepreneurs can now avail a 25% tax concession in their income tax returns from Tax Year 2025 onwards.*

*This achievement is not just a personal milestone it is a victory for every woman who has the courage and capability to start and lead a business independently. It reinforces the belief that meaningful legal advocacy can create structural change.*

*For Nida, this victory is also a reminder of the power of the legal profession how a lawyer, through persistence and commitment, can contribute to transforming systems and positively impacting society.*

*Empowering women is not just policy reform it is nation building.*

27/10/2025

*FBR’s Digital Invoicing Policy — A New Threat to Data Security*

By: Sabir Jalil Farooqui, Advocate High Court.
(Vice President, Mirpurkhas Tax Bar Association.)"

Digital Progress or Digital Negligence?

The Federal Board of Revenue (FBR) has recently introduced its new “Digital Invoicing and Electronic Integration” policy, under which the data of all sales tax registered persons will be fully digitized and brought online. On the surface, this seems like a step toward modernization, but beneath it lie serious risks and challenges.

The Federal Tax Ombudsman (FTO) has recently revealed that "FBR’s IT system is vulnerable to cyberattacks and data leaks". Uploading billions of rupees’ worth of business transactions and invoicing details to such a fragile system poses significant threats to "public trust and national data security".

Sensitive Data in an Unsafe System

FBR’s existing data infrastructure already suffers from technical weaknesses. When a system that has already faced cyberattacks is expanded further, this action only multiplies the risks of "data theft, hacking, and financial fraud".

Now that every taxpayer’s invoice, transaction, and financial record will be uploaded to a digital platform, this is no longer merely a departmental matter — it becomes a "question of business community’s confidence" in the entire taxation framework.

Prioritize Cybersecurity Over Digital Policy

FBR must first secure and audit its IT system through an "independent cybersecurity review" before expanding its digital policies. Implementing digital invoicing without adequate protection is extremely risky. If data security cannot be ensured, FBR’s credibility in the eyes of the public will further erode.

Additional Burden and Business Challenges

FBR already collects all required information through monthly returns, STRNs, and other reporting mechanisms. Introducing additional digital integration layers will only "increase administrative complexity and financial burdens".

Small traders and manufacturers, who are already under economic stress, may lose further confidence in the system. This could ultimately "slow down new registrations in the tax net" rather than expanding it.

Direction of Reforms — Practical Recommendations

According to the recommendations of the Central Committee of the Federal Tax Ombudsman, the government and FBR should take the following steps:

1. First, "upgrade and independently audit" the IT system.
2. Until cybersecurity standards are fully met, "suspend the implementation of all new digital policies".
3. Simplify tax laws to make them "business-friendly and trust-based".
4. Frame new regulations keeping in view "ground realities and challenges faced by the business community".

Digital reforms are indeed the need of the hour, but their implementation without "cybersecurity, transparency, and trust" is meaningless. Taxpayers’ data is a "national trust", and if FBR cannot safeguard that trust, the digital invoicing policy may turn into a dangerous experiment.

FBR must first strengthen its internal systems before introducing digital invoicing — only then can Pakistan establish a "safe, transparent, and credible digital tax framework."






Extension for Income Tax TTY 2024-25
30/09/2025

Extension for Income Tax TTY 2024-25







*📢 Important Update on Sales Tax Invoice Upload in IRIS*After uploading data into the Sales Tax Invoice Management syste...
12/07/2025

*📢 Important Update on Sales Tax Invoice Upload in IRIS*

After uploading data into the Sales Tax Invoice Management system on IRIS, many users have encountered the "Invalid – The calculated percentage sales tax does not match" error. Despite validating and even re-uploading data with rounding, a significant number of invoices (over 90%) are still being marked as invalid.

*🔍Root Cause Identified:*
Effective 1st July 2025, FBR has implemented a new template for uploading sales tax invoice data. As per the updated format:

✅ Both the "Value of Goods" and "Tax Amount" fields must be entered with exact values, up to two decimal places.
❌ Rounding off will trigger validation errors.

*📌 Solution:*
Ensure that all invoice data is uploaded accurately with atleast two decimal places for both the value and tax amount. Once this standard is followed, the validation errors will be resolved, and the upload process will function smoothly without interruptions.

*

11/07/2025

*Tax advisors are challenging FBR's new "Password Policy" and QR Scan system!🚨*

Pakistan Tax Advisors Association Chairman Javed Iqbal Qazi has approached FBR, highlighting severe hardships for tax practitioners who file 90% of returns.

The mandate for 60-day password changes and a new QR scan login means constant verification codes, causing immense time wastage and system breakdowns. Practitioners managing multiple clients find it "impossible" to keep up. While FBR blames fake invoices, advisors argue the real culprits aren't being caught, and the burden is unfairly shifted. They demand a stable system, an end to arbitrary changes, and direct action against fraudsters.

10/07/2025

*Section 21(q) Amended – 10% Expense Disallowance for Purchases from Non-NTN Holders | Finance Act, 2025*

Through the Finance Act, 2025, the Federal Government has substituted Section 21(q) of the Income Tax Ordinance, 2001, significantly tightening the requirements for expense deductibility in relation to purchases from non-NTN holders.

Under the new provision, 10% of the expenditure claimed on account of purchases made from persons not holding a valid NTN (National Tax Number) will be disallowed. This aims to discourage undocumented transactions and bring more individuals and businesses into the formal tax net.

The earlier version of this clause disallowed expenditure in proportion to sales made to unregistered persons under the Sales Tax Act, 1990. The substituted provision now directly targets purchase-side non-compliance.

*Exemptions:* An exception has been carved out for the purchase of agricultural produce, wherein the
disallowance shall apply only to purchases made from middlemen, not directly from growers.

Furthermore, the FBR is empowered to exempt any person or class of persons from the operation of this clause through a notification in the official Gazette, subject to specified conditions and
limitations.

*Compliance Tip:* To ensure full deductibility of expenses, businesses must ensure that their suppliers hold a valid NTN. Failure to do so can result in partial disallowance of claimed expenses and an increase in taxable income.

10/07/2025

*🔔FBR High Alert – Important Change in Tax Return Filing (2025)*

*📢 PIN Replaced with Verification Code!*

FBR has introduced a major update in the return verification process for Tax Year 2025.
Instead of entering a PIN, taxpayers will now receive a Verification Code on their registered mobile number for submission of the tax return.

*⚠️ Important:*
This change may cause delays during peak filing days due to high system load and code delivery issues.

*✅ Action Required:*

Ensure your registered mobile number is active and correct.

File early to avoid last-minute system congestion.

Stay updated to avoid any inconvenience.

10/06/2025

BUDGET FY26

The government is proposing tax relief for the salaried class. The key proposals include:

For income between Rs. 600,000 and Rs. 1,200,000, the tax rate will be cut from 5% to 1%.

For income between Rs. 1,200,000 and Rs. 2,200,000, the tax rate is proposed to be lowered from 15% to 11% along with reduction in fixed tax from Rs. 30,000 to Rs. 6,000.

For income between Rs. 2,200,000 and Rs. 3,200,000, the tax rate will be reduced from 25% to 23%.

24/05/2025

*Key Points from IMF Meeting:*

The government has assured to achieve a primary surplus of 1.6% of GDP in FY2026. The focus of the discussion was on expanding the tax net and prioritizing expenditures.

Discussions on the FY2026 budget will continue in the coming days. Authorities emphasized the need for a sufficiently tight and data-driven monetary policy to keep inflation within the State Bank's medium-term target (5-7%).

Additionally, rebuilding foreign exchange reserves, maintaining a fully functional foreign exchange market, and allowing for greater exchange rate flexibility were deemed essential to strengthening the economy against external shocks.

#

24/05/2025

*Karachi, May 24, 2025 — The Karachi Tax Bar Association (KTBA) has sounded the alarm over the Federal Board of Revenue’s (FBR) sweeping changes to sales tax return filing, warning that the system overhaul under SRO 578 has pushed the entire business community into chaos.*

The KTBA has declared that sales tax compliance has become nearly impossible under the current digital regime.

*In a high-profile seminar held in Karachi, the KTBA spotlighted the avalanche of challenges facing taxpayers due to the FBR’s newly introduced sales tax filing system. Experts and tax professionals shredded the new annexures, particularly the controversial Annexure C1, calling it a “compliance nightmare.” Muhammad Usman Farooq, presenting a detailed breakdown of the revised sales tax return format, said the changes have added layers of complexity without providing adequate technical support or training.*

The KTBA minced no words, stating that the new sales tax filing process has halted operational efficiency. Businesses, especially SMEs, are struggling to cope with the immense data required — including details on every customer payment, issuing bank, cheque numbers, and payment instruments. *“We are being forced into a data jungle without a compass,”* remarked one KTBA member.

*Annexure C1, the crown jewel of the FBR’s reform, demands granular tracking of payments against sales invoices, demanding details such as customer CNICs, invoice numbers, payment dates, and issuing bank details. This level of micromanagement has led to an administrative meltdown, particularly for retailers and wholesalers handling high transaction volumes.*

*Adding fuel to the fire, KTBA said credit sales — where payments often arrive after the tax period — now pose a timing hazard, making correct sales tax filing nearly impossible under the existing rules. Businesses face the threat of non-compliance through no fault of their own.*

27/02/2025

ISLAMABAD: Provincial Revenue Authorities (PRAs) and departments have shared data with the Federal Board of Revenue (FBR) for the purpose of broadening the tax base.

Sources told Business Recorder that so far provincial land and revenue authorities, development authorities, vehicle ownership, Mineral and Mines and Food Authority have shared data with the FBR.

The FBR is now analysing data including ownership of vehicles and properties to check whether the information can be utilised to register wealth persons.
This data was required to be used to unearth hidden assets of individuals having lavish lifestyles to enhance revenue collection.

Sources stated that FBR has now vehicle ownership data of over 21 million people from all four provinces. In addition, the development authorities have also shared over 0.1 million citizens’ details with the tax department. Moreover, the provincial revenue authorities have also furnished over 20,000 CNIC-centric record while the provincial land authorities have also provided more than 23 million people land related details with FBR.

The provincial Food Authorities as well as Minerals and Mines departments have also shared CNIC centric data with FBR.

The FBR has been working on this data but there are no chances to broaden the tax base through this raw information specifically about the property ownership and luxury vehicle registrations.

At the same time, the FBR has acquired data from the National Database and Registration Authority (Nadra) on high-net worth more than 50 million individuals - who have bank accounts, property ownership, luxury vehicle registrations, foreign travelling - for the purpose of broadening the tax base.

The FBR and the Nadra had agreed to expand collaboration and exchange data to determine the actual income of existing taxpayers, register new taxpayers, and finalise tax profiles of non-filers.

Under Section 175B of the Income Tax Ordinance, the Nadra shall, on its own motion or upon application by the board, share its records and any information available or held by it, with the board, for broadening the tax base or carrying out the purposes of the Income Tax Ordinance.

26/02/2025

FTO orders 18% sales tax on solar net metering consumers

Move aims to plug Rs9.8 bn revenue loss; tax to be charged on gross supply, not net metering basis
ISLAMABAD: The Federal Tax Ombudsman (FTO) has directed power distribution companies (DISCOs) to charge an 18% sales tax on electricity supplied to solar net metering consumers, citing a revenue loss of Rs9.8 billion. The order, issued Monday, mandates the Federal Board of Revenue (FBR) and DISCOs to enforce the tax on the gross value of electricity supplied, rejecting the net metering deductions previously applied.
The FTO clarified that the Sales Tax Act 1990 does not recognize net metering adjustments, and the tax must be levied on the total electricity supplied by DISCOs to consumers, regardless of any energy fed back into the grid. A similar ruling applies to the withholding of income tax under Section 235 of the Income Tax Ordinance 2001, which must also be deducted on the gross amount.

The order rebuffs previous guidance from the National Electric Power Regulatory Authority (NEPRA) and the Alternative Energy Development Board (AEDB), stating that tax laws override any regulations issued by these entities. It further criticized 11 out of Pakistan’s 12 DISCOs for failing to comply with legal tax provisions, noting that only K-Electric has been charging sales and income tax correctly on electricity bills.
The FTO’s decision follows a complaint from a K-Electric consumer who alleged discriminatory treatment, as NEPRA’s 2015 framework had allowed net metering deductions. However, the FTO ruled that fiscal laws take precedence over regulatory guidelines.

The FBR has been directed to ensure immediate compliance by all DISCOs, including Faisalabad Electric Supply Company (FESCO), Lahore Electric Supply Company (LESCO), Islamabad Electric Supply Company (IESCO), and others. Additionally, the FTO has urged an inquiry into the massive annual revenue losses resulting from the misapplication of tax laws.


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M. A Jinnah Road Crossing, Zaibunnisa Street, Karachi
Karachi
74200

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0300-3396916

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