Tax body urges FBR to launch IRIS test environment and extend consultation period for 2026 return forms
The Karachi Tax Bar Association (KTBA) has urged Pakistan’s tax authority to introduce pilot testing of income tax return forms for Tax Year 2026 before formal rollout, citing technical, formatting, and procedural concerns.
In a letter addressed to Zubair Bilal, Member Inland Revenue (Operations) at the Federal Board of Revenue (FBR), KTBA President Muhammad Mehmood Bikiya said the draft return forms issued under S.R.O. 835(I)/2026 require practical testing through the IRIS system to ensure functionality and ease of compliance.
The association said reviewing PDF-based drafts alone was insufficient, as the electronic filing system includes validation checks, computational formulas, auto-population features, and backend linkages that cannot be assessed in isolation.
KTBA highlighted previous issues in Tax Year 2025 returns, including glitches and structural deficiencies that only emerged after live deployment, arguing that earlier pilot testing could have helped resolve such problems.
The bar body also raised concerns over formatting and readability of the draft forms, saying many sections were distorted or illegible due to small font size and layout issues.
It further noted that the proposed return includes expanded disclosure requirements covering foreign assets, gifted properties, assets held in others’ names, and detailed financial summaries, which require broader consultation with stakeholders.
KTBA said the absence of explanatory notes for new fields and validation criteria could create compliance difficulties for taxpayers, particularly individuals unfamiliar with complex reporting requirements.
The association also criticised the seven-day consultation window, calling it insufficient given the complexity of the proposed changes, and urged an extension to allow meaningful feedback from practitioners.
It additionally recommended that a comparative summary of changes from previous tax year forms be issued to help stakeholders focus their review.
KTBA further proposed that draft forms be made available in a test environment on IRIS, alongside Excel-based versions and clearer documentation to facilitate review.
The group also pointed out delays in the notification and finalisation timeline under Rule 34A of the Income Tax Rules 2002, stating that statutory deadlines for issuance and availability of return forms have not been met.
KTBA concluded by urging authorities to conduct pilot testing with tax bar representatives, professional bodies, and selected taxpayers before finalising the forms to reduce filing season challenges.