ISLAMABAD: Tax Laws (Amendment) Ordinance, 2025, promulgated on May 2, 2025, has empowered the Federal Board of Revenue (FBR) to enforce immediate tax recovery despite right of appeal to the aggrieved taxpayers against court decisions.
Tax experts told Business Recorder that the recent Tax Laws (Amendment) Ordinance, 2025, promulgated on May 2, 2025, has raised serious concerns within the business community, particularly due to three critical implications:
(i); Immediate Tax Recovery Despite Appeals:
Under new subsections 138(3A) and 140(6A), tax demands become immediately payable or recoverable even if a stay is granted or an appeal is pending, provided a related issue has been decided by a High Court or Supreme Court. This severely undermines due legal process and creates a chilling effect on taxpayers’ right to appeal and fair adjudication.
(ii); Posting of Inland Revenue Officers at Business Premises:
The section 175C allows the FBR to station officers directly at business premises to monitor production and services. This invites unwarranted interference in day-to-day operations and opens doors to potential harassment and administrative overreach.
(iii); Expanded Powers for Excise Monitoring:
The amendments in the Federal Excise Act now permit monitoring and enforcement through non-FBR officers, significantly expanding enforcement reach. The private-sector industries may face unexpected scrutiny from provincial or federal officials not directly accountable to FBR protocols.
According to a tax expert, one of the effects of the amendment is that courts and tribunals - at the time of issuing a judgment on a tax matter - cannot suspend recovery of the tax due in order to enable the taxpayer to lodge an appeal without facing the department’s coercive action for recovery of the tax due.
The second and the more important effect is that tax assessed against a taxpayer shall be immediately recoverable or recoverable upon the expiry of the time mentioned in the notice issued under section 138/140 of the Ordinance notwithstanding anything contained in the Ordinance. For example, the time enshrined in section 137 of the Ordinance or any judgment of any court or tribunal like Pakistan LNG judgment of the IHC, tax expert added.
Copyright Business Recorder, 2025
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