Revamping mode of ADRC appointments: FBR seeks input from stakeholders

ISLAMABAD: The Federal Board of Revenue (FBR) is seeking input from different stakeholders to revamp the mode and manner of appointing Members of the Alternative Dispute Resolution Committee.

Director General (Law) of FBR Dr Ishtiaq told Business Recorder; “We are seeking input from different stakeholders and after consultation will prepare the report. Hopefully it will make the ADRC more transparent and credible.”

A two-member bench, headed by Chief Justice of Pakistan Yahya Afridi, on July 3 while hearing the Zarai Taraqiati Bank Ltd’s petition had directed the FBR to submit report on ADRC on 24-07-25.

FBR refuses to share info about ADRCs cases

Dr Ishtiaq had told the Court that the FBR is open to any constructive suggestions regarding ADRC proceedings, as mandated under the law. CJP Yahya, therefore, allowed the FBR to consult with the stakeholders.

Advocate Hafiz Ahsaan Ahmad Khokhar, constitutional and tax law expert, said the need for an effective and structured Alternative Dispute Resolution (ADR) system, particularly in tax matters, has become critical.

He maintained that the conventional litigation model has not only overwhelmed the judiciary but has also severely impaired the state’s ability to realise tax revenues in a timely manner.

Thousands of tax cases involving hundreds of billions of rupees are languishing before appellate tribunals, High Courts, and the Supreme Court, creating uncertainty for businesses, discouraging investment, and delaying revenue recovery. A credible ADR system is now essential for easing this burden, restoring taxpayer confidence, and ensuring fiscal efficiency. He observed that despite having enabling statutory provisions for ADR under Section 134A of the Income Tax Ordinance, 2001; Section 47A of the Sales Tax Act, 1990; Section 38 of the Federal Excise Act, 2005; and Section 195C of the Customs Act, 1969, Pakistan has yet to operationalize ADR in a meaningful way. The reasons for this failure are well-known: lack of transparency in constituting ADR Committees, inclusion of serving tax officers on panels, absence of qualified and neutral arbitrators, lack of digital infrastructure, and the non-binding nature of ADR outcomes—especially in factual disputes.

Copyright Business Recorder, 2025