A. KC Views

Inspite of FBR version specified in TLQC 3290 of today as well as media since yesterday, owing to matter in BG (other than TLQC 3290), especially over 15 reasons our TLQC 3288 of Sunday 28.9.25 (as partly covered Business Recorder of 29.9.25 as well) and matters in this TLQC too, we reiterate our views that that extension is highly likely to be allowed between 10pm to 1159pm today OR will be announced in early hours of 1.10.25 night, upto 31.10.25 (or in worst scenario upto 15.10.25) via Circular, ISA.

B. Background (BG)

(1) As per Business Recorder of 29.9.25 Expert Asif Kasbati warns of IRIS slowdown on 29 & 30.9.25 plus for 15 Other reasons, he recommended Govt to announce extension - Sohail Sarfraz  (Attachment 3290.1) (2) Professional Accountants Forum (PAFO) IT Return extension to FM - Several reasons (Attachment 3290.2) (3). This refers to our TLQCs in trail, in blue, in italic and after double line (a) 3290 of 30.9.25 about IT Return TY 2025 – FBR claimed that no extension & KC Views(b) 3288 of 28.9.25 about IT TY 2025 Return Extension inevitable as over 15 Reasons (b) 3287 of 27.9.25 about IT Return TY 2025 & Wealth Statement Property FMV Disclosure removed (c) 3283 of 25.9.25 about IT Return TY 2025: IRIS Portal Glitches Hindering Tax Return Filing – PTBA, etc, etc.

B. Updated Commentary

1. Further to KQU 3579 of 30.9.25, being an important matter, we would inform you about as per expected Pro Pakistani FBR Likely to Extend Tax Return Deadline (Attachment 3291.3) in the ensuing paragraph, with emphasis in bold & Underline, heading ours for quick reading; while matter in Italic by KC.

2. The FBR is expected to announce an extension for the filing of IT Returns for the TY 2025, moving the deadline from 30.9.25 to 14.10.25, high-level sources in the FBR told ProPakistani.

3. The official notification is scheduled for release at midnight tonight, according to sources.

4. So far, 3.6 million taxpayers have filed their returns. The tax department has set a 10 million internal target of income tax filers for the current fiscal year. A total of 7.6 million tax returns were filed in the last fiscal year, 2024-25. (KC: 8.1 M as per ATL - our TLQC 3288 of 28.9.25 para 5.6 refers)

5. Sources told ProPakistani that this target is not an IMF requirement but an internal benchmark set by the FBR.

6. The extension comes as the FBR faces mounting pressure to boost compliance and meet its ambitious revenue goals. The move is expected to provide much-needed relief to taxpayers struggling with technical glitches and last-minute rushes.

7. Tax professionals and business groups have been urging the FBR to extend the deadline, citing ongoing issues with the online filing system and the need for more time to complete documentation.

8. According to a letter from Mr Faraz Fazal Sheikh Advocate, President Rawalpindi Islamabad Tax Bar Association addressed to the Prime Minister, Section 118 of the ITO, 2001, requires (a) individuals and associations of persons with a tax year from 1.7.24 to 30.6.25, and (b) companies with a year-end between 1.7.24 and 31.12.24, to file their Tax Year 2025 returns on or before 30.9.25.

9. The letter respectfully requests the PM to direct the FBR to issue a circular granting a general extension of the filing deadline to at least 31.12.25. It also urges that this extension be widely announced through electronic and print media to avoid millions of individual extension requests.

10. The request cites several challenges (KC: Most of these covered in our TLQC3288 of Sunday 28.9.25)

i. Delayed Issuance of Return Forms

Under Rule 34A(2)(e), (3), and (4), FBR was required to issue final return forms in July 2024. However, these forms were only issued on 18.8.25, over 13 months late. SRO 1562 (dated 18.8.25) introduced eight categories of electronic returns, while SRO 1561 provided simplified electronic IT return forms for salaried individuals without business income. This delay significantly reduced the effective time available for taxpayers to prepare and submit accurate returns.

ii. Floods, Torrential Rain, and Internet Disruption

Severe rains in August and early September 2025 affected the entire country, with devastating floods impacting Khyber Pakhtunkhwa, Punjab, and Sindh. These events, combined with generally slow internet speeds, have made it difficult for taxpayers to access and file returns on the IRIS system. The resulting cash flow constraints have further limited taxpayers’ ability to meet their obligations, despite advance and withholding tax payments.

iii. IRIS System and FBR Policy Challenges

The IRIS system has repeatedly failed or slowed down throughout September 2025, leading to incomplete filings and repeated data loss—even after returns were saved. Taxpayers often had to restart the process from scratch. Tabs and sections in IRIS have disappeared and reappeared at various times, causing confusion and delays. The introduction (on 23.9.25) and late removal (on 26.9.25) of the Fair Market Value column created further confusion just days before the deadline. Historically, IRIS experiences slowdowns near filing deadlines, and these issues remain unresolved.

iv. Expected Return Volume and Non-Compliance

Based on the recent Active Taxpayers List (ATL) and government reports, at least 10 million returns are expected to be filed for Tax Year 2025. Even with prior payments through withholding and advance taxes, the remaining time is insufficient for taxpayers to prepare accurate returns. An extension until 31.12.25 would allow for proper compliance, maintain taxpayer confidence, and reduce the trust deficit.

v. FBR/PRAL Differences and System Upgrades

The planned closure of PRAL by December 2025 and incomplete IT system upgrades risk disrupting tax-related functions. Despite government digitization efforts and World Bank support, divided authority and delayed data centre readiness have limited system reliability. Granting an extension would help avoid complications during PRAL’s transition and protect taxpayers from technical failures.

In light of these challenges, the letter urges that the filing deadline for Tax Year 2025 be extended to at least 31.12.25, with an official circular issued immediately and public announcements made through electronic and print media. This, the letter argues, will allow taxpayers to file accurate returns, reduce errors, and strengthen voluntary compliance.

C. Further Details & Services

Should you require any clarification or explanations in respect of the above or otherwise, or require Income Tax, Federal & Provincial Sales Tax or Withholding Tax Statement, Advisory, Return Filing or Review services, please feel free to email Mr Amsal at amsal@kasbati.co with CC to info.kasbati@professional-excellence.com, asif.s.kasbati@professional-excellence.com.

Best regards for Here & Hereafter
Asif S Kasbati (FCA, FCMA & LLB)

Managing Partner

Kasbati & Co (1400+ Tax, Levies, Companies, Economy, Inflation, HR, Banking, Finance, etc

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