KARACHI: Tax advisors and consultants have formally approached the Federal Board of Revenue (FBR) to express strong reservations against its new Password Policy, which mandates taxpayers to change their IRIS account passwords every 60 days. The situation has been further complicated by the recent implementation of a new QR Scan system for login, creating significant operational hurdles for tax practitioners across Pakistan.
Javed Iqbal Qazi, Chairman of the Pakistan Tax Advisors Association, has informed the FBR chairman that a consistent policy is urgently needed for the operation of IRIS accounts. He highlighted that approximately 90 percent of income tax and sales tax returns are prepared and filed by tax advisors, practitioners, advocates, chartered accountants, and cost and management accountants, all of whom are registered with the FBR. Only a small fraction, about 10 percent, are filed by corporate taxpayers’ employees or salaried individuals themselves.
The New Policy: A Compliance Nightmare
The IRIS system was reportedly functioning smoothly until the FBR introduced the new Password Policy on December 18, 2024, requiring password changes every 60 days. This was compounded by the implementation of the QR Scan system, which now demands that every registered person scan a QR Code each time they log in to IRIS for preparing or filing returns.
Qazi elaborated on the severe practical difficulties faced by tax practitioners:
Time-Consuming Coordination: With over 90 percent of returns handled by practitioners, each login now requires contacting the taxpayer for a verification code. This constant coordination consumes an “excessive amount of precious time.”
System Instability: The IRIS system frequently breaks down, slows down, or even logs out users, forcing practitioners to repeat the cumbersome login process.
Impractical for Multiple Clients: Given that each tax practitioner manages numerous clients, contacting every client for a verification code for each login attempt is deemed “impossible.”
FBR’s Justification and Association’s Counter-Argument
The Pakistan Tax Advisors Association chairman stated that inquiries into the reasons behind these frequent changes revealed that the FBR attributes them to the issuance of “fake and flying invoices and sales tax returns.”
However, Qazi countered that the FBR has not adequately investigated or identified the individuals responsible for such fraud, whose information should be available within the IRIS system. He argued that instead of holding violators accountable through proper inquiry, adjudication, and court processes, the FBR has opted for system-wide changes that burden compliant taxpayers.
Qazi emphasized that in foreign countries, culprits of such offenses are swiftly apprehended and punished. He criticized the FBR for not initiating a similar process to catch the perpetrators who have “disturbed the entire password system,” instead resorting to repeated login process changes that may not be a permanent solution in the modern IT era.
Call for Action and Permanent Solutions
In light of these challenges, the Pakistan Tax Advisors Association has urged the FBR to take “proper and rapid action” against those involved in fake and flying invoices. They have called for the introduction of a “permanent system for password saving” to alleviate the hardships faced by tax practitioners and protect them from arbitrary litigation by tax functionaries who have failed to ensure the success of the previous system.
Javed Iqbal Qazi specifically recommended that the FBR Member Operations and FBR Member IT be given the “specific task to save the taxpayers from the frequent changes in the IRIS system,” highlighting the need for a stable and user-friendly tax compliance environment. This appeal underscores the growing frustration within the tax advisory community over policies that, while aimed at curbing fraud, inadvertently create significant operational inefficiencies for legitimate taxpayers.
