LAHORE: Tax professionals have expressed grave concerns over reappointment of retired officers at senior positions in the Federal Board of Revenue (FBR), especially in its operations wing, which is affecting the performance, credibility and institutional integrity of this premier revenue collection agency.
In a letter to Prime Minister Shehbaz Sharif, Lahore Tax Bar Association (LTBA) President Muhammad Asif Rana and General Secretary Mian Asad Hanif said that the current trajectory of policy decisions within the FBR, particularly under the operations wing, has led to systemic dysfunction, public dissatisfaction, and internal disillusionment.
This practice not only undermines merit and service rules but has also resulted in poor administrative judgment and superficial policy making, they said. Under the leadership of retired officers, the operations wing has adopted short-sighted, performance-oriented optics, aimed more at creating the illusion of progress than implementing real, sustainable reform, they added. Instead of focusing on long-term tax base expansion, digital facilitation, and taxpayer trust-building, the strategy has leaned heavily on coercive tactics, reactive policy reversals, and disruptive system interventions, they observed.
They said a fundamental example of this mismanagement was the inordinate delay in issuing the income tax return forms for Tax Year 2025, violating legal timelines and severely disrupting compliance processes. Elaborating the issue, they said: “As per Rule 34A of the Income Tax Rules, 2002, the draft return form was due by 1st December 2024, but was issued 219 days late on 7th July 2025 while the final return form, required by 31st January 2025, was notified 199 days late, on 18th August 2025. Consequently, under Section 118 of the Income Tax Ordinance, 2001, taxpayers were legally entitled to 92 days for return filing. However, due to the delayed notification, 49 days of the statutory period had already lapsed, creating legal ambiguity and frustration among taxpayers.”
This unprecedented delay not only violated statutory requirements but also compromised FBR’s operational credibility and revenue collection targets, they pointed out in the letter. Further, they added, compounding the issue were multiple abrupt and poorly executed changes in FBR’s digital platform (IRIS), which created widespread confusion among taxpayers and tax practitioners including incorrect application of Section 4AB to exempt shares from Association of Persons (AOPs) and errors in minimum tax apportionment, faulty computation of tax on profit on debt under the Section 151. Likewise, further systematic complications include, unexplained implementation of QR code scanning, ultimately after 25 days its withdrawal, resetting of IRIS passwords after 60 days and its withdrawal, unannounced insertion of “estimated current market value” in the wealth statement without any explanation and withdrawn within 48 hours.
The letter said that appointment of retired officers to powerful management positions, particularly when qualified serving officers are readily available has led to institutional discontent, frustration, and erosion of morale within the FBR. Senior officers, despite years of service and experience, are being overlooked in favor of individuals with no accountability to the service framework, they observed.
This practice, they pointed out in the letter, also contradicts the principles laid out in the Civil Servants Act, 1973, and violates the spirit of institutional continuity, transparency, and fair career progression. These developments also seriously undermine the government’s broader tax reform agenda. Rather than fostering a culture of voluntary compliance and facilitating taxpayers into the formal economy, current strategies have done the opposite, alienated taxpayers, discouraged new entrants, and hampered national revenue collection efforts.
Similarly, the unpredictable and stringent policies implemented by the FBR are contributing to an increasingly challenging business environment. As a result, both multinational and local companies are either scaling down operations or relocating their businesses outside Pakistan, they letter noted with concern.
The LTBA demanded in the letter that future appointments to key management positions be made from among eligible serving officers, based on seniority, merit, and service record. Moreover, an independent inquiry be conducted to review recent operational decisions and their compliance with legal, procedural and technical standards.
Copyright Business Recorder, 2025