KARACHI: The Pakistan Tax Bar Association (PTBA) has urged the Federal Board of Revenue (FBR) to immediately address legal and technical issues in the newly introduced Income Tax Return for Tax Year 2026 and review the recently introduced Fixed Tax Scheme for Small Traders.
In a letter to FBR Chairman Rashid Mehmood Langrial, the association welcomed the tax authority’s digitization efforts but expressed concern over the delayed rollout of the revised tax return on the IRIS portal, saying taxpayers and tax practitioners have been left with limited time to understand the new filing requirements.
According to the PTBA, the redesigned return contains several operational issues, including errors in imported immovable property records, incomplete withholding tax data, and difficulties in locating information in the new auto-populated return format.
The association warned that these issues could slow down the filing process and increase compliance risks for taxpayers.
PTBA also criticized the FBR for introducing the revised return without sufficient consultation with tax professionals, arguing that early stakeholder engagement could have resolved many technical and procedural concerns before implementation.
Concerns Over Fixed Tax Scheme
The association also questioned the legal validity of the Fixed Tax Scheme for Small Traders, introduced through SRO 1166(I)/2026.
According to PTBA, the prescribed Annex-I cannot legally replace the statutory income tax return required under the Income Tax Ordinance, 2001, without explicit legislative authorization.
The association sought clarification on several aspects of the scheme, including:
Eligibility criteria for traders
Treatment of taxpayers with multiple income sources
Audit protection
Withholding tax obligations
Penalties for non-compliance
Exemptions from Point-of-Sale (POS) integration and digital invoicing
PTBA urged the FBR to review both the revised income tax return and the Fixed Tax Scheme in consultation with stakeholders to remove ambiguities and facilitate smoother tax compliance before full implementation.
