FBR processes long-pending tax refund within three weeks

ISLAMABAD: In a remarkable display of institutional respect and administrative efficiency, the Federal Board of Revenue (FBR) Islamabad field formation has complied with the order of the Federal Tax Ombudsman (FTO), Zafar ul Haq Hijazi, and processed the long-pending tax refund within just three weeks.

Sources told that the matter traces its roots to a prolonged ordeal faced by a taxpayer, which had been waiting for the adjustment of its pending refund claims spanning Tax Years 2017 to 2023 against its tax liability. Despite approaching the department well in time, tax office Islamabad remained unresponsive, forcing the taxpayer to seek redress from the FTO.

Sources further added that FTO Zafar-ul-Haq Hijazi, took a sharp and unambiguous view of the department’s conduct. After a thorough examination of the written complaint, comments submitted by the department, and the hearing conducted, FTO found the department’s inaction to be a clear case of maladministration.

In his findings, the FTO pointedly observed that while the department exercises extraordinary speed when adjusting refunds against tax demands it has itself created, it denies the very same legal right to taxpayers despite their repeated, legitimate requests. The FTO characterized this double standard as arbitrary treatment that must be firmly discouraged.

Critically, the FTO noted that the department only stirred into action, issuing a notice under Section 170(4), after this office had issued formal notices. Without the FTO’s intervention, the taxpayer’s rightful claim might have continued to languish indefinitely. In its order dated 08 April 2026, the FTO directed FBR to ensure immediate disposal of the refund claim, issue system-wide instructions to all field formations making it mandatory to dispose of pending refund claims before initiating any coercive recovery action against taxpayers.

When contacted tax lawyer Waheed Shahzad Butt, who has represented the taxpayer before the FTO told this correspondence that this prompt compliance sends a powerful signal, when institutional oversight functions as it should, bureaucratic lethargy can be overcome. It demonstrates that the FTO forum is not merely a ceremonial body, but an effective instrument of taxpayer justice. Butt has welcomed this outcome as a meaningful precedent. The episode underscores the importance of the FTO as a constitutional safeguard for taxpayers who find themselves at the mercy of administrative delays and arbitrary departmental conduct.

FBR’s timely response reflects a commendable respect for the FTO forum, an institution established precisely to hold revenue authorities accountable. It is hoped that this spirit of compliance becomes a norm rather than an exception, and that FBR’s field formations internalize the FTO’s broader directive, no taxpayer should face coercive recovery while their legitimate refund claims remain unresolved: Waheed Butt added.

Copyright Business Recorder, 2026