Islamabad, May 5, 2025 — The Finance Ministry on Monday defended the recently issued Tax Laws (Amendment) Ordinance, 2025, saying it aims to plug legal and administrative gaps in the tax system and ensure fair and efficient tax enforcement.
The Ordinance, approved by the President on May 2, introduces only three targeted changes, all intended to enhance tax collection and bring more transparency to the system.
According to a press release by the Ministry of Finance, the first amendment deals with Sections 138(3A) and 140(6A) of the tax laws. These changes focus on making sure that tax amounts confirmed by the Supreme Court or High Courts are paid immediately, without unnecessary delays—even if taxpayers have filed appeals or requested a stay in other forums.
The Finance Ministry explained that this amendment tackles a long-standing issue: even after the highest courts had ruled in favor of the government, there was a 30-day grace period during which taxpayers could delay payment. As a result, billions in revenue remained stuck, despite clear court rulings. Now, under the Ordinance, such confirmed payments must be made immediately, helping the government recover lost funds faster.
It’s important to note that this new rule does not apply to cases still being heard by lower courts or tax tribunals. It only applies to cases that have already been decided by the Supreme Court or High Courts. Also, any valid stay orders issued by these higher courts will still be honored. The change is designed solely to enforce already-decided cases where no further legal protection exists for the taxpayer.
The second amendment in the Ordinance relates to Section 175C and allows the Federal Board of Revenue (FBR) to post its officers at the premises of certain businesses for monitoring purposes. This move is not aimed at ordinary traders—who are already monitored under other tax laws—but rather at large, high-end service providers who often operate outside the sales tax system.
According to the Finance Ministry, businesses such as luxury hotels, upscale restaurants, event planners, and hatchery firms with high sales volumes are being monitored to improve tax fairness. Until now, much of the tax burden has fallen on salaried individuals and manufacturers, while high-income service sectors often avoided proper taxation. The new system ensures that FBR officers operate under strict rules, with checks in place to avoid misuse of authority. Coordination with other regulatory bodies and clearly written standard operating procedures (SOPs) will guide the officers’ conduct.
The third and final amendment focuses on the conduct of FBR officers during visits to business premises. These officers will now follow a detailed and transparent process, including the use of bar-coded authorization letters and mobile devices to record their interactions. Every visit will require officers to fill out standardized forms that are submitted electronically and on paper to the FBR and relevant supervisors.
To prevent abuse of power or harassment of businesses, the Finance Ministry has included strong oversight measures. Civil intelligence agencies will keep an eye on the officers’ behavior, and any reports of misconduct will be quickly investigated. Furthermore, all monitoring activities will be reported to the Prime Minister every week to ensure top-level accountability.
In summary, the Finance Ministry maintains that the Tax Laws (Amendment) Ordinance, 2025, is a necessary step toward a more just and efficient tax system. By strengthening enforcement and monitoring mechanisms, the Ordinance aims to reduce tax evasion, improve revenue collection, and ensure that all sectors of the economy contribute fairly. The government believes these legal changes, though limited in number, will have a meaningful impact on the overall effectiveness of Pakistan’s tax system.