Islamabad, December 12, 2025 – The Federal Board of Revenue (FBR) has introduced significant amendments to the Income Tax Rules, 2002, aimed at streamlining the process of recognizing active taxpayers belonging to Azad Jammu and Kashmir (AJK) and Gilgit-Baltistan (GB). The draft amendments were issued through SRO 2423(I)/2025 on December 11, 2025.
According to the proposed changes, the FBR plans to revise Rule 81B, particularly sub-rule (9), to ensure clarity and consistency in determining the status of taxpayers from AJK and GB in Pakistan’s Active Taxpayers List (ATL) under Section 181A of the Income Tax Ordinance.
Under the amended provisions, individuals listed as active taxpayers by the AJK Central Board of Revenue or the Gilgit-Baltistan Council Board of Revenue will be included in Pakistan’s ATL if they meet specific conditions. These include having a temporary or permanent address within AJK or GB, or having both temporary and permanent addresses in Pakistan, subject to an additional verification process.
For taxpayers falling under the second category, the FBR has detailed a two-stage verification mechanism:
1. Verification by Commissioner Inland Revenue (CIR):
The CIR with jurisdiction based on the CNIC-linked temporary address must confirm that the taxpayer has no employment or business activities within Pakistan. This verification will be carried out through the IRIS system after inquiries and obtaining a formal undertaking from the individual.
2. Verification by AJK or GB Tax Authorities:
The relevant Commissioner of the AJK Central Board of Revenue or the GB Council Board of Revenue must verify that the taxpayer’s sole employment or business activities exist within AJK or GB. This confirmation will also be processed through IRIS.
The amendments further empower authorities to monitor compliance. If the Commissioner Inland Revenue has reason to believe that such individuals are liable to file returns under Section 114 but fail to respond to notices, their names will be removed from the Active Taxpayers List in accordance with Section 181A.
Tax experts believe these reforms aim to enhance transparency, prevent misuse of taxpayer status, and strengthen coordination between federal and regional tax authorities. The FBR has invited stakeholders to review the draft and submit feedback before the amendments are finalized.