The federal government has triggered serious concerns across the business and legal communities by granting sweeping, extraordinary powers to the Federal Board of Revenue (FBR) through the Tax Laws Amendment Ordinance, 2025—bypassing parliamentary debate just weeks ahead of the federal budget.
This latest move, driven by a colossal Rs830 billion tax shortfall, reeks of desperation and signals a dangerous shift toward unchecked executive authority.
President Asif Ali Zardari’s decision to promulgate this ordinance speaks volumes about the government’s financial panic. Rather than presenting these drastic changes through the budget process and allowing public scrutiny, the FBR has now been armed with aggressive new tools to clamp down on taxpayers, directly access bank accounts, and even post officers inside business premises. These are not just procedural adjustments—they are an alarming encroachment on civil and commercial liberties.
One of the most disturbing aspects of the ordinance is the insertion of Section 138(3A) in the Income Tax Ordinance. This provision allows the FBR to initiate immediate recovery of tax liabilities once a superior court rules against a taxpayer—eliminating time extensions and limiting legal recourse. It disregards the fact that multiple legal issues may still be unresolved or pending in higher courts. With this, the FBR is now empowered to recover dues directly from taxpayers’ bank accounts or through third parties, effectively turning tax collection into a punitive weapon.
The FBR has also gained powers under the newly added Section 175C, allowing the Chief Commissioner to post Inland Revenue officers at business premises to monitor production, supply, and even unsold stock. This Orwellian surveillance-style enforcement will breed fear, disrupt operations, and deepen distrust between businesses and the state. Legal experts warn that such measures erode due process and incentivize corruption within tax enforcement agencies.
Further amendments to the Federal Excise Act enable the FBR to confiscate goods lacking proper tax stamps, barcodes, or labels—again, authorizing both federal and provincial officials to wield power without sufficient oversight. The ambiguity and wide net cast by these provisions will likely ensnare legitimate businesses already reeling from inflation and high compliance costs.
For a government that set a sky-high revenue target of Rs12.97 trillion, these draconian changes signal failure. Only Rs36 billion has so far been recovered in windfall tax cases—far below the Rs400 billion promised by Prime Minister Shehbaz Sharif. Unrealistic fiscal expectations have backfired, and now the FBR is being weaponized to close the gap—at the expense of legal safeguards and economic stability.
The Lahore Chamber of Commerce and Industry has rightly denounced these amendments, demanding their reversal. If not curbed, this unchecked empowerment of the FBR will cripple business confidence, stifle investment, and alienate the very taxpayers the state seeks to engage.
This is not reform. This is panic policy-making, and it risks turning the FBR into a predator rather than a partner in national progress.