The Pakistan Tax Bar Association (PTBA) has called on the Federal Board of Revenue (FBR) to immediately stop what it described as the discriminatory enforcement of Section 7E of the Income Tax Ordinance, 2001, relating to tax on immovable properties.
In a formal representation, the PTBA said it has received numerous complaints from district tax bars in Punjab and Sindh, where taxpayers are being issued notices and forced to pay tax under Section 7E. However, similar enforcement actions are not being carried out in Islamabad, Khyber Pakhtunkhwa, and Balochistan, raising serious concerns over unequal treatment.
Section 7E, introduced through the Finance Act 2022, imposes tax on deemed income from immovable property, calculated at one percent of the fair market value. The provision was challenged by taxpayers across the country, leading to conflicting rulings by different High Courts.
While the Sindh High Court upheld Section 7E, the Islamabad, Peshawar, and Balochistan High Courts declared it unconstitutional. Although appeals were filed, the Supreme Court has not suspended the rulings of these courts. Following the 27th Constitutional Amendment, the cases now remain pending before the Federal Constitutional Court.
As a result, taxpayers in some provinces are not paying the tax, while those in Punjab and Sindh continue to face enforcement actions. The PTBA stressed that income tax is a federal levy and must be applied uniformly across Pakistan.
The association urged the FBR chairman to ensure equal treatment of taxpayers in line with Articles 4, 10A, and 25 of the Constitution, warning that selective enforcement undermines fairness and the rule of law.