Automated income tax refund system: FBR fails to implement IHC judgement

ISLAMABAD: The Islamabad High Court’s landmark judgment for effective enforcement of an automated income tax refund system has not been fully implemented by the Federal Board of Revenue (FBR).

The court’s directive aimed to facilitate taxpayers and minimise interaction with tax functionaries, but the FBR has failed to take concrete steps in this regard.

It is reliably learnt that a landmark order issued by IHC remained unimplemented by FBR despite lapse of considerable time.

Refund cannot be blocked for pendency of tax reference: IHC

When contacted tax lawyer Waheed Shahzad Butt who is representing the petitioner told this correspondent that a report titled “Findings and Recommendations of Committee for Effective Enforcement of Section 170A of the Income Tax Ordinance 2001” was submitted to the IHC, outlining comprehensive recommendations for implementation. However, despite assurances from Member (Policy) FBR that these recommendations would be implemented, no progress has been made till date.

Waheed Butt further added that FBR’s inaction is particularly surprising given the government’s efforts to digitize tax processes. The failure to implement the automated refund system as directed by the IHC raises concerns about the FBR’s commitment to transparency and efficiency. FBR’s lack of progress on this front is a missed opportunity to streamline tax processes and improve the overall taxpayer experience.

This will not only enhance transparency and efficiency but also demonstrate the FBR’s commitment to upholding the rule of law and respecting the directives of the judiciary: Waheed added.

IHC order states: “FBR has submitted a report titled ‘Findings and Recommendations of Committee for Effective Enforcement of Section 170A’. The report and recommendations appear fairly comprehensive, and the Member (Policy) FBR appearing today has stated that these recommendations will be implemented in accordance with the US$ 25 million loan expected to be provided by the World Bank.”

The objective of this petition seems to have been achieved. The petition is accordingly disposed of, leaving it open for the petitioner to approach the Court again if the recommendations are not implemented, IHC ordered.

Copyright Business Recorder, 2025