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ISLAMABAD: The Federal Board of Revenue (FBR) has introduced digital solution to expedite the resolution of tax disputes and reducing prolonged litigation through a technology driven process.

Under the new provision introduced through Finance Bill 2026, the FBR will be empowered to establish a digital system capable of generating settlement offers for registered taxpayers before the issuance of final assessment orders.

The mechanism is designed to facilitate early resolution of tax proceedings by offering taxpayers an opportunity to settle disputes through a transparent and automated framework.

READ MORE: PM okays plan to overhaul tax dispute system

Explaining the significance of the initiative, tax expert Arshad Shehzad said that the system-generated settlement offers would be based on multiple factors, including the stage of proceedings, the taxpayer’s compliance history available with the FBR, the nature of the discrepancy identified, and other criteria considered relevant by the Board.

According to the proposed framework, taxpayers receiving a settlement offer will have ten days to accept the offer through the IRIS portal and deposit the specified settlement amount. Once payment is made, the issues raised in the relevant notice or audit report will stand abated, effectively bringing those proceedings to a close.

While welcoming the overall concept, Shehzad observed that the mechanism has the potential to significantly reduce litigation, accelerate dispute resolution, and improve revenue collection through voluntary compliance. However, he suggested that an additional layer of review could further strengthen the system.

“A specialized committee may be introduced to review taxpayers’ responses and objections before finalizing assessments. Such a mechanism could help fine-tune settlements and ensure greater fairness and equity in the process,” he said.

Shehzad noted that the initiative forms part of broader efforts to modernize Pakistan’s tax administration through technology-driven solutions, reduce compliance costs for taxpayers, and enhance certainty in tax matters.

Copyright Business Recorder, 2026

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