ISLAMABAD: The National Assembly Standing Committee on Finance delivered sharp criticism against the government and the Federal Board of Revenue (FBR) for bypassing the legislative body by enforcing the Tax Laws (Amendment) Ordinance, 2025, without prior parliamentary debate.
Committee expresses strong disapproval
During a meeting chaired by MNA Syed Naveed Qamar, committee members expressed deep frustration over the ordinance, specifically Ordinance No. IV/2025, being urgently circulated to FBR field offices for immediate recovery actions against taxpayers. Concerns from various trade bodies and stakeholders were also highlighted.
Chairman Qamar labeled the executive action as a “misuse of executive power,” arguing that it fundamentally denied taxpayers their right to appeal before enforcement measures were initiated. He directed the Law and Justice Division to ensure the ordinance is promptly presented before Parliament for debate and proper legislative consideration.
FBR Chairman Rashid Mahmood Langrial defended the ordinance, stating it had been lawfully approved by both the federal cabinet and the president. He requested the committee grant a one to two-month trial period for the ordinance, asserting its necessity in addressing critical legal gaps in tax enforcement processes.
Skepticism persists, questions raised on urgency
Despite the FBR’s defense, committee members remained unconvinced. They questioned the rationale behind the urgent issuance of the ordinance and bypassing the usual procedure of incorporating such amendments into the upcoming Finance Bill 2025-26. A representative from the Law Division admitted to the urgency but failed to provide a clear justification when pressed. The committee emphasized that any changes to tax laws must undergo careful evaluation to mitigate potential negative impacts on the economy and various sectors.
Naveed Qamar reiterated that the FBR had not presented a persuasive explanation for the need to issue the ordinance without prior consultation. He assured the committee would conduct a thorough scrutiny of the ordinance once it is formally tabled as a bill in Parliament.
MNA Mirza Ikhtiar Baig also criticized the move, arguing it contradicts the FBR’s own stated objective of creating a more business-friendly tax environment. He noted significant opposition from trade organizations, including the Federation of Pakistan Chambers of Commerce and Industry (FPCCI).
Details of the contested amendments
The FBR Chairman elaborated that the ordinance contains only three specific, targeted amendments focused on streamlining tax recovery processes, particularly after final court decisions. He stated that Sections 138(3A) and 140(6A) were introduced to close legal loopholes that had previously allowed delays in payment, resulting in the non-recovery of billions of rupees in tax revenue, even after verdicts from the Supreme Court or High Courts.
The committee concluded that while efficient legal enforcement is necessary for tax collection, such reforms must not be pursued at the expense of parliamentary oversight or by infringing upon the fundamental rights of taxpayers.
