Karachi, January 3, 2026 — Exporters who maintained transparent accounts and made accurate disclosures in their income tax returns for tax year 2025 are unlikely to face difficulties. However, exporters who concealed income or provided misleading information may now encounter serious repercussions as the Federal Board of Revenue (FBR) steps up scrutiny of exporters’ tax filings.
With the return filing deadline ending on December 31, 2025, the FBR has initiated a preliminary review of income tax returns, including those submitted by exporters operating under the revised tax framework.
Why Are Exporters Being Scrutinized?
The growing concern among exporters arises from significant tax reforms introduced through the Finance Act, 2024, which reshaped the taxation of export income in Pakistan.
A senior FBR official told PkRevenue that exporters were previously taxed under a simplified system, but recent amendments now require greater transparency, detailed documentation, and income reconciliation.
“Exporters with clean accounting records have no reason to worry. But any concealment or misreporting discovered later will create serious challenges,” the official cautioned.
Understanding the Tax Regime Shift
To grasp the current enforcement drive, it is important to understand the difference between the Final Tax Regime (FTR) and the Minimum Tax Regime (MTR).
Final Tax Regime (Before July 1, 2024)
• Advance tax collected under Section 154 at 1 percent of export proceeds
• Treated as final tax liability
• No requirement for detailed income reconciliation
• Simplified return filing
• No post-filing scrutiny of export income
Minimum Tax Regime (Effective July 1, 2024)
Implemented through the Finance Act, 2024, and applicable to tax year 2025:
• Advance tax treated as minimum tax, not final tax
• Exporters required to file normal income tax returns
• Mandatory disclosure of:
O Raw material purchases
O Manufacturing and production costs
O Export shipment details (quantity and value)
O Export proceeds received from overseas buyers
O Local sales and other sources of income
• Subject to income reconciliation, audit, and scrutiny
Why Tax Year 2025 Matters for Exporters
Key Factor Details
| Applicable regime | Minimum Tax Regime |
| Return type | Normal income tax return |
| Filing deadline | December 31, 2025 |
| Current status | Preliminary scrutiny underway |
| Major risks | Under-declaration, misreporting, incomplete records |
Is the FBR Specifically Targeting Exporters?
The FBR has clarified that exporters are not being singled out. However, the tax authority emphasized that any discrepancy identified in returns, regardless of the taxpayer category, will be dealt with strictly in accordance with the law.
Potential consequences may include:
• Heavy financial penalties
• Additional tax assessments
• Audit proceedings
• Legal action under the Income Tax Ordinance, 2001
FBR’s Goal: Strengthening Compliance, Not Harassment
According to the FBR, the current scrutiny drive is not solely focused on revenue generation. Instead, it aims to detect revenue leakages, improve documentation, and ensure full compliance with Pakistan’s income tax laws.
“This scrutiny is a legal obligation. The objective is to plug revenue leakages and promote a documented economy,” the official explained.
What Exporters Should Do Now
• Review income tax returns filed for tax year 2025
• Verify that declared figures match supporting documents
• Reconcile export proceeds with banking channels
• Stay prepared for possible notices or clarifications
• Seek professional tax advice in case of discrepancies
Bottom Line
The transition from the final tax regime to the minimum tax regime has placed exporters within a more transparent and accountable taxation system. While compliant exporters remain on safe ground, those who failed to adjust to the new requirements may now find themselves under increased scrutiny.