KARACHI:A tax lawyers' group has asked Pakistan's federal tax authority to fix what it calls critical errors in an online tax-filing system before this month's filing deadline.
The Karachi Tax Bar Association said this week that the Tax Year 2026 income tax return on the Federal Board of Revenue's IRIS portal is miscalculating the "Difference of Minimum Tax" in cases involving tax collected or deducted under Section 153 of the Income Tax Ordinance, 2001.
In a letter to FBR Member Inland Revenue (Operations) Zubair Bilal, the association said it had received complaints from taxpayers and members about liabilities generated by the system that, in its view, have no clear basis in tax law. The group said the portal does not disclose the formula or assumptions behind the additional charges, making them difficult to verify.
The association argued that any system-generated minimum-tax calculation should have a clear statutory basis and should not override the self-assessment process established under the ordinance. It said minimum-tax liability should instead be determined by comparing the applicable minimum tax with the normal tax that a taxpayer computes and declares, based on factors including the nature of the business, different types of income, applicable provisions, and allowable expenses and deductions.
The group also alleged the current formula may result in a form of double taxation. It said the system, in some cases, applies normal tax rates without fully accounting for income already subject to minimum-tax treatment, potentially taxing the same income twice and generating extra liability despite tax already being collected or deducted at the source.
The association called on the tax authority to immediately review the formula and remove any system restrictions preventing taxpayers from making legally permitted adjustments. It said the portal should function as a tool for implementing tax law, not for imposing unsupported liabilities or limiting taxpayers' own calculations.
With filing for Tax Year 2026 underway and the deadline set for Sept. 30, the association urged a prompt resolution and asked the tax authority to let taxpayers disclose relevant facts and determine their liabilities under the self-assessment framework. The group said it remains available for further talks with the tax authority on the matter.
