Karachi, April 23, 2025 — The Karachi Tax Bar Association (KTBA) has raised serious concerns over the abrupt cessation of new sales tax registration by the Federal Board of Revenue (FBR), calling the move disruptive and counterproductive to business compliance and economic activity.
In a formal letter addressed to Finance Minister Muhammad Aurangzeb and FBR Chairman Rashid Mahmood Langrial, KTBA President Ali A. Rahim highlighted that the process of new sales tax registration has been virtually suspended for the past six months. This indefinite pause, he warned, is creating significant obstacles for individuals and businesses seeking to fulfill their legal tax obligations under the Sales Tax Act, 1990.
KTBA emphasized that tax practitioners and registered persons are already grappling with numerous challenges related to registration, return filing, POS integration, and other compliance measures. However, the halt in new registration and the arbitrary suspension or blocking of already registered taxpayers have become the most pressing concerns. According to KTBA, such measures are being carried out without due process or adherence to legal protocols, thereby undermining transparency and justice.
The association noted that field offices of the FBR in Karachi are demanding documentation and procedures that are not only outside the scope of Section 14 of the Sales Tax Act, 1990, but also contradict rule 5 of SRO 555(I)/2006. This, KTBA argues, is placing an unfair burden on new applicants and sending a discouraging message to the compliant business community.
Moreover, KTBA strongly criticized the arbitrary suspension and blocking practices being exercised by FBR field formations. These actions, taken without adherence to Supreme Court rulings—particularly in cases like Eagle Cables (CPLA 2400-L/2022) and Skypak Enterprises (CPLA 682/2017)—have generated widespread frustration. KTBA warned that such unchecked powers are fostering an environment of distrust and perceived exploitation among taxpayers.
KTBA further highlighted that despite its efforts, including its earlier communication under Letter No. KTBA/03.2025/035 dated March 7, 2025, the FBR has failed to acknowledge or act upon these concerns. The ongoing delays in addressing registration-related issues have even led to repeated extensions in sales tax return filing—an implicit admission of the FBR’s operational shortcomings.
In its concluding remarks, KTBA urged the FBR to take immediate action and implement the following measures:
1. Resume new sales tax registration in full compliance with statutory provisions and set mandatory timelines for completion.
2. Cease arbitrary suspension and blocking of registered taxpayers, ensuring all actions align with due process and established legal precedents.
3. Engage stakeholders, including KTBA, in resolving technical issues and restoring confidence in the system.
KTBA reiterated that the revival of fair and timely registration processes is essential for building trust in the tax system and ensuring sustainable, voluntary compliance across Pakistan. Without such reforms, the credibility of FBR and the broader tax infrastructure remains at risk.