Lahore, October 28, 2025 – Mounting frustration over persistent technical glitches in the Federal Board of Revenue’s (FBR) IRIS portal has pushed the Lahore Tax Bar Association (LTBA) to take an unprecedented step — appealing directly to Prime Minister Muhammad Shehbaz Sharif for intervention.
In a strongly worded letter issued on Tuesday, LTBA President Muhammad Asif Rana urged the Prime Minister to extend the return filing deadline for tax year 2025 to November 30, citing “serious system flaws” that have paralyzed taxpayers’ ability to comply before the October 31 cutoff.
Rana emphasized that despite the FBR’s earlier extension via Circular No. 05 dated October 15, 2025, several critical errors and procedural inconsistencies still remain unresolved, leading to erroneous tax computations, incomplete filings, and system crashes on the IRIS platform.
Key Technical and Legal Issues Highlighted by LTBA
1. Incorrect Application of Tax Credit and Section 4AB:
The FBR’s system is wrongly calculating tax on exempt income from an Association of Persons (AOP), despite Section 92 of the Income Tax Ordinance, 2001 clearly exempting such income. Furthermore, the system is inappropriately applying Section 4AB (10% super tax) on exempt income — an error that contradicts the law and has triggered thousands of erroneous tax demands.
2. Apportionment in Minimum Tax Regime:
The LTBA pointed out that the IRIS portal is apportioning taxes incorrectly, even in cases where the minimum tax regime applies — a concept only meant for the final tax regime. This malfunction has caused unjustified tax liabilities and confusion among filers.
3. Misapplication of Tax on Profit on Debt (Section 151):
The system is illegally applying Section 151 instead of Section 7B, resulting in over-taxation on profit on debt. The LTBA noted this violates Sections 7B, 8, 168, and 169(2)(e) of the Income Tax Ordinance, creating widespread financial discrepancies.
4. Failure to Notify Manual Return Form:
Under Rule 73(2DD) of the Income Tax Rules, 2002, the manual (paper-based) return form was required to be published — yet, the FBR has failed to notify it for tax year 2025. This non-compliance has left many taxpayers, especially those without reliable internet access, unable to file returns.
Delay in Notifications and Statutory Period Violations
The LTBA also highlighted the FBR’s delay in publishing the final return form, which was legally required by December 1, 2024, but was only released on July 7, 2025 — a staggering 219 days late. The official notification followed on August 18, 2025, after another 199-day delay, leaving taxpayers with barely half the statutory 92-day filing window allowed under Section 118.
Rana stressed that the delay in notification itself shortened the compliance period by 49 days, effectively violating the spirit of the law and justifying the need for an additional extension until November 30, 2025.
Growing Legal and Compliance Risks
The LTBA warned that due to the unresolved system issues and erroneous tax computations, many taxpayers are considering litigation, which could further complicate tax administration and delay revenue collection. The bar emphasized that the government must act swiftly to protect the integrity of the tax system and maintain public confidence.
“Given the technical obstacles, legal ambiguities, and lost statutory days, it is only fair that the deadline be extended till November 30, 2025,” the LTBA concluded in its appeal to the Prime Minister.
As the October 31 deadline looms, the pressure is mounting on the FBR to respond — and taxpayers across the country are anxiously waiting to see whether Prime Minister Shehbaz Sharif will grant the much-needed relief.