Members of ADR bodies: FBR proposes revised remuneration structure
ISLAMABAD: The Federal Board of Revenue (FBR) has proposed revised remuneration structure for members of Alternative Dispute Resolution (ADR) committees.
The FBR has proposed amendments to the Income Tax Rules, 2002, to revamp the mechanism for resolution of tax disputes through Alternative Dispute Resolution (ADR) committees.
Through draft SRO 1496(I)/2026 issued on September 2, 2026, the FBR has proposed substituting Rule 231C relating to alternative dispute resolution under Section 134A of the Income Tax Ordinance, 2001. Stakeholders have been given seven days to submit objections or suggestions on the proposed amendments.
Under the proposed mechanism, an aggrieved person seeking resolution of a dispute will be required to submit a written application to the FBR in the prescribed form, along with details of the nominee, including CNIC, telephone number, permanent address and email address. The applicant will also be required to provide an undertaking and furnish three names of retired judges proposed by the taxpayer’s nominee for appointment as chairperson of the ADR Committee.
The FBR has also proposed a revised remuneration structure for members of ADR committees. Where the disputed tax liability is up to Rs 50 million, the chairperson will receive a lump-sum one-time remuneration of Rs 300,000, while each member, excluding the Chief Commissioner Inland Revenue, will receive Rs 150,000.
Where the disputed tax liability exceeds Rs 50 million, the chairperson will receive Rs 500,000 and each member, excluding the chief commissioner Inland Revenue, Rs 250,000. The chairperson and members may also be allowed TA/DA according to the entitlements admissible to BPS-22 and BPS-21 officers of the federal government, respectively.
The draft further provides that multiple applications filed by the same taxpayer during the same financial year involving identical issues may be clubbed and processed together where the appointed chairperson is the same and the committees are constituted within 90 days. In such cases, the members will be treated as constituting a single committee for all purposes, including determination of remuneration.
The proposed rules also address situations where an ADR committee becomes defunct or is dissolved due to administrative, legal or procedural reasons not attributable to the FBR or taxpayer. In such cases, no remuneration will be payable, while any amount already advanced or deposited will have to be refunded within 15 days of dissolution.
Moreover, any chairperson or member who becomes unavailable or unable to perform his functions due to conflict of interest or any other reason will have to formally inform the FBR in writing within seven days of notification of the committee’s constitution. However, once remuneration has been released or paid, the member or chairperson will not be entitled to recuse or withdraw until a final decision is reached or the committee is dissolved.
The proposed amendments also prescribe an application form requiring taxpayers to provide details including NTN, CNIC, address, contact information, relevant tax year, the concerned Commissioner Inland Revenue, facts and law relating to the dispute, the taxpayer’s interpretation of the relevant law or facts, and the amount of tax, if any, the applicant agrees to pay.
The draft rules further provide a prescribed format for withdrawal of an appeal under Section 134A(9). The applicant would withdraw the pending appeal or reference after constitution of an ADR committee, with provision for reinstatement of the appeal if the committee fails to decide the matter within the stipulated time.
Copyright Business Recorder, 2026