Expert warns of IRIS slowdown ahead of IT return filing deadline

ISLAMABAD: A tax expert has expressed serious concern over the likely slowdown of the Federal Board of Revenue’s (FBR) “IRIS” system during the last two working days of income tax return filing, as the total number of returns filed till Sunday stood at around 3 million.

When contacted, Asif S Kasbati, Senior Member of the ICAP Fiscal Laws Committee, told Business Recorder that the current filing number of around 3 million is far less than the taxpayers appearing on the Active Taxpayers List (ATL). He suggested that taxpayers on the ATL should be given an opportunity to file their returns during an extended period, which the FBR may announce.

Individuals, Associations of Persons (AOPs), and certain companies with year-ends between July 1, 2024, and June 30, 2025, are required to file Tax Year (TY) 2025 returns on or before September 30, 2025. Owing to more than 15 reasons, Kasbati argued that an extension in the filing deadline till October 31, 2025 is inevitable. He appreciated the role of Tax Bars in highlighting glitches in the return forms and IRIS issues.

Kasbati elaborated that under Section 118 of the Income Tax Ordinance: (a) Individuals and AOPs with a year from July 1, 2024, to June 30, 2025, and (b) Companies with a year-end between July 1, 2024, and December 31, 2024, are required to file their TY 2025 returns on or before September 30, 2025. Based on his 33 years of tax experience, he believed that a general extension until October 31, 2025 is most likely.

He pointed out that the FBR missed deadlines for issuing final return forms, despite Rule 34A (2)(e), (3), and (4), which required issuance by January 1, 2025. Instead, the forms were delayed by more than six months, with eight categories of electronic forms notified through SRO 1562 on August 18, 2025. Similarly, the so-called simplified electronic return forms for salaried individuals (not having business income) were issued vide SRO 1561.

Kasbati added that torrential rains and devastating floods in Khyber Pakhtunkhwa, Punjab, and Sindh during August and September 2025 disrupted office work, slowed internet speed nationwide, and caused severe cash flow issues, despite government claims of economic improvement.

He further noted that the IRIS system was either non-functional or extremely slow for several days in September 2025. Moreover, a late change requiring fair market value of property was incorporated in late September but withdrawn on September 26, 2025, just four days before the deadline.

Kasbati predicted that IRIS is likely to work very slowly on September 29-30, 2025, as has been experienced in previous years.

He highlighted that similar deadlines add pressure on the system, such as the annual sales tax return deadline on September 30, 2025, and the e-invoicing and integration deadline for companies with a turnover above one billion rupees on October 15, 2025.

Referring to tax base broadening, he recalled that former Finance Minister Shaukat Tarin had stated there were 15 million non-filers, while former special assistant to the PM Dr Waqar Masood had mentioned 7.4 million. Kasbati expected that a minimum of 10 million returns should be filed for TYs 2024 and 2025, compared with 8.1 million taxpayers on the ATL as of September 26, 2025.

He appreciated a 43.62 percent increase in filings compared to TY 2023 but noted that tax collection from new taxpayers has not risen accordingly. Based on his experience, he estimated that less than 30 percent of required returns would be filed by the deadline, even against the benchmark of 8.1 million in TY 2024.

For ease of doing business, Kasbati urged that relief be given by extending the deadline to October 31, 2025, for those unable to file by September 30, 2025. This, he said, would enhance taxpayers’ confidence in the government and reduce the trust deficit.

On technology reforms, he recalled that the Prime Minister had ordered the closure of PRAL by December 2025, as the government had obtained a USD400 million foreign loan in 2019 for IT upgrades, of which USD80 million was earmarked for technology. However, reforms could not be implemented due to divided responsibilities. He noted that establishing a new organisation by December would be challenging, especially as the authorities failed to hire a chief information security officer despite repeated attempts.

Kasbati pointed out that the Pakistan Tax Bar Association (PTBA), Karachi Tax Bar Association (KTBA), Lahore Tax Bar Association (LTBA), and other bars, as well as, several trade bodies have already requested a one-month extension. He expected more applications from different organisations shortly.

He advised taxpayers to file their returns as soon as possible by September 30, 2025, or by the extended deadline, if granted, to avoid default surcharge, penalties, and notices. He also recommended submitting online extension applications under Section 119 as a precaution.

Copyright Business Recorder, 2025