MULTAN: The Lahore High Court (LHC) has expressed strong displeasure over the exemption granted to the Federal Board of Revenue (FBR) from paying court fees for filing Tax References, while ordinary citizens are forced to pay a hefty Rs50,000 per reference.
This blatant disparity, which disproportionately burdens the people of Pakistan, particularly in cities like Multan, exposes a deeply rooted issue of systemic discrimination in the country’s taxation and legal framework.
The LHC’s bench, while hearing a case concerning the removal of the Commissioner Inland Revenue (Appeals) position under the 2024 Tax Laws Amendment Act, remarked that this amendment is causing significant harm to the judicial system. The court noted that by eliminating the initial appeal process, the amendment not only obstructs the normal flow of justice but also leads to unnecessary delays in case resolution.
In Multan, a city with a rapidly growing economy driven by agriculture, trade, and manufacturing, this change has sparked concerns among business owners, tax consultants, and legal experts. Multan has only one tax bench available, making it extremely difficult for local taxpayers to seek timely justice. The LHC’s concerns over overburdening courts are even more relevant for cities like Multan, where already stretched legal resources struggle to cope with rising tax disputes.
Taxpayers in Multan have long faced bureaucratic hurdles in their dealings with the FBR, with many cases ending up in court due to poor decision-making by tax officials. The LHC pointed out that decisions made by Commissioners (Appeals) are frequently flawed, lacking legal references, proper hearings, and careful reasoning. These shortcomings often force cases to be re-evaluated, wasting time and resources for businesses and individuals.
The Ministry of Law and Justice has argued that removing the Commissioner (Appeals) level would simplify the appeal process, reduce paperwork, and ease the backlog of tax cases. They claim that around Rs. 2 trillion in tax revenue is currently stuck in disputes before the Appellate Tribunal, primarily due to delays caused by a lack of functional benches and slow proceedings.
However, the LHC countered that the removal of the first appeal step has, in reality, created a new bottleneck by increasing the burden on the High Courts. With limited tax benches available only one in Multan this decision is set to create further congestion in the judicial system, making justice even harder to obtain for the city’s businesses and taxpayers.
The FBR’s inefficiency has been a longstanding issue, with frequent complaints about arbitrary tax assessments, delayed refunds, and a lack of transparency. The LHC highlighted that many FBR appeals are filed due to incompetently drafted decisions that lack clear legal foundations. Instead of addressing the root problem—improving tax administration and accountability—the government has chosen to push the burden onto taxpayers and courts.
This issue is especially pressing for Multan, where small and medium-sized businesses already struggle with an unpredictable tax environment. By forcing them to take their disputes directly to the High Court without an intermediate appeal stage, the government is effectively discouraging fair litigation, making it harder for businesses to challenge unfair tax demands.
Recognizing the gravity of the situation, the LHC has summoned Dr. Ishtiaq A. Khan, Director General of FBR, to present a detailed explanation regarding the reasoning behind this amendment. The court expects clarity on its objectives, the rationale behind burdening the judiciary, and how it impacts taxpayers’ rights, particularly those in underprivileged regions like South Punjab.
For Multan’s citizens and business community, this amendment is yet another example of how Pakistan’s bureaucratic elite designs policies that favor institutions over ordinary taxpayers.
While the FBR enjoys privileges like fee exemptions, ordinary citizens are left struggling with rising costs and legal complexities. If justice is to be truly accessible, reforms should focus on fixing inefficiencies within the tax administration rather than making the courts a battleground for revenue collection at the expense of the people.
