Karachi Tax Bar Association urges the FBR to remove the non-editable opening wealth balance restriction in IRIS to help returning residents file their Tax Year 2026 declarations correctly.
The Karachi Tax Bar Association (KTBA) has urged the Federal Board of Revenue (FBR) to urgently resolve a technical issue in the IRIS tax filing system that is creating difficulties for individuals returning to Pakistan after periods of non-residence.
In its latest representation to the tax authority, the association highlighted a restriction in the Wealth Reconciliation Statement for Tax Year 2026. According to the KTBA, the system automatically transfers the opening wealth balance from the last filed Wealth Statement and does not allow taxpayers to modify the amount.
This restriction creates complications for individuals who were previously residents of Pakistan, subsequently became non-residents, and later returned to the country. Since their wealth statements were not required during their non-resident years, the system’s automatic carry-forward mechanism can prevent them from entering the appropriate opening balance for the year they resume residency.
IRIS Restriction Creates Wealth Reconciliation Problems
The KTBA explained the issue through an example involving a Pakistani citizen who remained a resident taxpayer until Tax Year 2023 and submitted the required income tax return and wealth declarations for that period.
During Tax Years 2024 and 2025, the individual became a non-resident and declared only Pakistan-source income. Under Section 116(2) of the Income Tax Ordinance, 2001, the individual was not required to submit Wealth Statements for those years.
However, after returning to Pakistan and becoming a resident during the period relevant to Tax Year 2026, the individual became obligated to file both a Wealth Statement and a Wealth Reconciliation Statement.
The problem arises when IRIS automatically inserts the wealth balance recorded on June 30, 2023, into the opening balance field for Tax Year 2026. Because the field cannot be edited, the taxpayer cannot enter the appropriate opening wealth position and reconcile the movement in assets and liabilities for the relevant year.
KTBA Calls for Changes to IRIS 2.0
The association has requested that the FBR modify the relevant system validation to allow returning residents to enter an appropriate opening wealth balance based on their records and applicable legal requirements.
The KTBA also argued that the tax filing system should facilitate compliance with Section 116(2) without extending the statutory reporting obligation to years in which taxpayers were not required to submit wealth statements.
The association maintains that taxpayers should be able to declare their opening wealth position under the applicable self-assessment framework, subject to the law. The KTBA has called for an urgent solution so affected individuals can accurately complete and submit their Tax Year 2026 Wealth Statements and Wealth Reconciliation Statements without unnecessary complications arising from previous non-resident years.