MULTAN: Tax experts have raised urgent concerns about Pakistan’s complex tax laws, which they argue are driving individuals and businesses away from the tax net.
At a seminar organized by the Multan Tax Bar Association in cooperation with the Pakistan Tax Bar Association (PTBA), President Shabbir Fakhruddin pointed out that convoluted tax regulations burden honest taxpayers.
A straightforward and transparent tax system is crucial for a stable economy, but those who pay taxes with integrity are often caught in audits and legal issues, he said.
General Secretary Multan Tax Bar Association Rana Muhammad Imran questioned “Are those who diligently pay taxes criminals?” He criticized the government’s focus on auditing compliant taxpayers while ignoring non-filers. “True reform will come when taxpayers are treated with respect and not trapped in a system that leaves them in constant confusion,” he emphasized.
President of the Pakistan Tax Bar Association (PTBA) Anwar Kashif Mumtaz expressed severe concern over recent tax reforms, claiming they have deteriorated the situation.
He criticized the new appeals system, saying it has added complexity and caused delays, with cases now taking months or even years to resolve.
He also highlighted the 126A provision, which mandates that disputed amounts in unresolved income tax cases be transferred to the government treasury, calling it unjustifiable. “Seizing funds without a final decision on the tax appeal is inequitable,” he said. Mumtaz also acknowledged the PTBA’s efforts to modernize smaller tax bars through technology such as ChatGPT, but emphasized that technological upgrades alone cannot address the systemic issues. “A fundamental overhaul of the tax framework is needed to resolve deep-rooted problems,” he concluded.
Multan, known for its Sufi heritage and as a hub for chartered accountants, has become the focal point of a growing judicial backlog. Despite clear directives from the judiciary, the case load in the Supreme Court continues to increase due to unnecessary revisions and prolonged appeals. The Federal Board of Revenue (FBR) has worsened the issue by neglecting non-compliant taxpayers while targeting those who pay higher taxes for audits. The introduction of new ordinances has further burdened the already strained appeals system. Additionally, banks are misclassifying individuals as tax filers, generating false wealth statements that create further financial and legal challenges for taxpayers.
In light of these concerns, Mumtaz called for a comprehensive approach to tax reform that addresses both the structural weaknesses in the system and the needs of taxpayers, who continue to bear the brunt of an inefficient tax administration.
Vice President PTBA Chaudhry Muhammad Shahid Saleem highlighted an alarming policy contradiction that non-filers face no scrutiny, but those paying higher taxes are exposed to immediate audits. This approach instills fear and discourages participation in the tax system.
Chairman Pakistan Tax Academy Abdul Qadir Memon raised significant concerns about the newly introduced tax reforms in Multan. While the establishment of a Tax Tribunal was aimed at easing local taxpayers’ burdens, the recent shift in tax laws requires critical scrutiny. Memon pointed out that changes in tax laws should be accompanied by open public debate to assess their effectiveness and public interest. He also criticized the 30% payment requirement under the new law, noting that many taxpayers cannot afford such payments, which could severely hinder compliance.
Memon also pointed to the growing caseload on tax tribunals due to the overhaul of the appeal system, which lacks filtering mechanisms. He advocated for reducing the load on these tribunals to ensure better access to justice for taxpayers.
Chief Commissioner Regional Tax Office Multan Inland Revenue Dr. Sarmad Qureshi acknowledged the FBR’s long-standing issues. Although the Litigation Management System has been introduced to streamline case handling, it has yet to prove effective in reducing the growing caseload. Qureshi reassured that only high-probability cases are being appealed, but this raises questions about the selection process and transparency.
Prime Minister Shehbaz Sharif’s directive to avoid unnecessary appeals in cases with low chances of success is a positive step. However, the real issue remains the FBR’s lack of accountability and its failure to address systemic inefficiencies. Special rewards for successful cases may incentivize tax officials, but until the underlying issues are addressed, such measures will not resolve the root causes of delay and inefficiency.
The ongoing tax reforms, while commendable in intent, require critical examination. The new law’s implementation risks creating a more cumbersome system that could further alienate taxpayers. If the government is serious about improving the tax landscape, it must prioritize systemic changes that address both efficiency and fairness for all citizens. Until then, the reform process remains a work in progress.
Experts at the event emphasized the urgent need for tax reform in Pakistan to achieve sustainable economic growth. They urged the government to take practical steps that not only address taxpayer challenges but also foster an environment conducive to business growth.
Souvenir shields were awarded to guests and others at the seminar by the Multan Tax Bar Association (MTBA) as a token of appreciation for their participation and contributions.
The seminar also featured notable speeches from Chief Commissioners Inland Revenue LTO Multan Nabeela Farhan Baig, Talat Javed, and Supreme Court Advocate Amjad Javed Hashmi, among others.
Distinguished attendees included Executive Members Irfan Sajid, Muhammad Saqib Anwar, Muhammad Siddiq, Chaudhry Muhammad Sohail, Muhammad Aslam Butt, Chaudhry Zubair Rafiq, Finance Secretary Furqan Ahmed Khan, Vice President Chaudhry Tanveer Shehzad, Library Secretary Tayabba Sattar, Joint Secretary Anwar Khalid and others.
