FTO fortifies taxpayers’ privacy protections

ISLAMABAD: Federal Tax Ombudsman (FTO) Zafar Hijazi, in a landmark order strengthening taxpayer confidentiality protections, has directed the tax department to ensure that fiscal data and confidential tax information of taxpayers is not disclosed or made accessible to unauthorized persons, reaffirming the confidentiality regime enshrined in Section 216 of the Income Tax Ordinance, 2001.

Sources told this correspondent that this novel order was passed on a Review/Rectification Petition by six taxpayer citizens of Gujranwala against FBR senior officer for violation of law and breach of fiscal data security.

All six petitioners were represented by Waheed Shahzad Butt, Advocate, while the Department was represented by Waqas Hanif, CIR and Hassan Mabroor, ADCIR.

The controversy traces back to an earlier Order dated 11.06.2026, in which the FTO had already recorded a categorical finding that confidential tax information belonging to the petitioners ought not to have been reproduced or incorporated into the assessment orders of other taxpayers and that such information ought to have been used strictly in confidence for official purposes.

READ ALSO: FBR says has not breached financial privacy of taxpayers

However, while recording this finding, the operative part of that order fell short of prescribing consequential directions to actually implement it, a gap that formed the basis of the present rectification petition.

Disposing of the matter after hearing both sides, FTO held that the grievance was well founded, observing that the omission to provide implementation directions was an inadvertent lapse apparent from the record and that rectifying it neither altered the findings already recorded nor enlarged the scope of the earlier order, it merely rendered the relief already granted complete and effective.

Importantly, the FTO observed that nothing prevents tax authorities from preserving material they consider relevant for official record and for production before appellate forums, provided such material is kept as part of the confidential departmental record, for instance by inserting a “Note: not for public” annotation on the relevant assessment orders or official documents, rather than disclosing it in orders accessible to other taxpayers.

The Chief Commissioner shall examine every assessment order identified in the earlier order and take such action as is permissible, to ensure that the Petitioners’ confidential tax information, once reproduced in another taxpayer’s assessment order, is no longer disclosed or accessible to any person not lawfully entitled to receive it.

In implementing this, the Department must adopt a lawful procedure that preserves the integrity of the official assessment record while simultaneously protecting the confidentiality of taxpayer information, retaining such material as part of the departmental record for official or appellate purposes wherever necessary.

The order underscores that the statutory confidentiality of fiscal data and tax returns under Section 216 is not merely a procedural formality but a binding obligation on tax authorities and that any departmental need to retain assessment-related material for legitimate purposes must be reconciled with, not achieved at the expense of a taxpayer’s right to confidentiality.

Copyright Business Recorder, 2026