Karachi, October 4, 2025 – In a dramatic move that could reshape Pakistan’s tax enforcement landscape, Inland Revenue (IR) officers have been empowered with court-like authority to summon individuals in tax-related cases.
This sweeping decision grants them judicial-style powers under Section 37 of the Sales Tax Act, 1990, a development that has already stirred intense debate among legal and business circles.
Under the amended provision, Inland Revenue officers can now summon any person they deem necessary for an inquiry, whether to provide evidence, submit records, or furnish documents related to tax matters. Failure to comply could expose individuals to penalties akin to ignoring a summons from a civil court. Legal experts say this transformation effectively blurs the line between administrative tax inquiries and judicial proceedings.
The law clarifies that any inquiry conducted by an Inland Revenue officer will be treated as a judicial proceeding under sections 193 and 228 of the Pakistan Penal Code. This means individuals providing false evidence or obstructing proceedings could face criminal consequences, including imprisonment.
Business leaders have expressed concern that such sweeping powers could be misused, potentially leading to harassment of taxpayers. On the other hand, tax officials argue that granting officers such authority is crucial to strengthen compliance, curb massive revenue leakages, and deter habitual evaders who previously ignored notices with impunity.
Moreover, IR officers will wield powers similar to a civil court, including summoning individuals on oath, demanding the production of documents, and even accepting affidavits as evidence. Analysts believe this measure will significantly boost the government’s ability to recover unpaid taxes, though critics warn it may also heighten friction between taxpayers and revenue authorities.