Category: Taxation

Islamabad, December 30, 2025 — In line with the federal government’s zero-tolerance policy against tax evasion and regulatory breaches, the Federal Board of Revenue (FBR) has sealed two sugar mills operating in Central Punjab for serious violations of sales tax laws.

Islamabad, December 29, 2025 – A BS-18 lady officer of the Inland Revenue Service (IRS) has been dismissed from service after corruption and misconduct charges were proven against her, according to a notification issued by the Federal Board of Revenue (FBR).

The final tax regime (FTR) remains an important—though often debated—feature of Pakistan’s income tax system for tax year 2026. While many tax experts argue that final taxation limits documentation and broadening of the tax base, the regime continues to apply to specific incomes under the Income Tax Ordinance, 2001, particularly through Section 169.

Online shopping in Pakistan is growing rapidly—and so is tax oversight. From tax year 2026, the Federal Board of Revenue (FBR) has significantly expanded its monitoring powers to track payments made through e-commerce platforms, payment intermediaries, and courier services. This change aims to improve documentation of the digital economy and widen the tax net.

Banks in Pakistan are legally required to share specific customer information with the Federal Board of Revenue (FBR). This data-sharing framework is aimed at widening the tax net, improving compliance, and identifying potential taxpayers through documented financial activity. The authority for this reporting comes from Section 165A and 165B of the Income Tax Ordinance, 2001.

Islamabad, December 28, 2025 – The Large Taxpayers Office (LTO) Lahore has taken strict disciplinary action by suspending four Federal Board of Revenue (FBR) officials who were found absent from their assigned monitoring duties at sugar mills. The move reflects LTO Lahore’s commitment to maintaining strict oversight and ensuring full compliance with tax monitoring regulations.

The withholding tax system is one of the strongest tools used by the Federal Board of Revenue (FBR) to identify individuals and businesses earning taxable income but remaining outside the tax net. At the heart of this system lie withholding tax statements, which act as a powerful data source for tracking economic activity across Pakistan.

If you are paying withholding tax to prescribed withholding agents under the Federal Board of Revenue (FBR), it is crucial to obtain a certificate of collection or deduction. This certificate is essential for filing your income tax return for tax year 2026.

When withholding tax is not collected or deducted, a common question arises: Who ultimately pays the unpaid tax—the withholding agent or the person receiving the payment? The Federal Board of Revenue (FBR) has clarified this under Section 162 of the Income Tax Ordinance, 2001 for tax year 2026.