A. Background (BG)

1. This refers to the related Important TLQCs in trail blue, italic and double Line (a) 3401 of 22.12.25 about FBR delayed its Obligations TY-2026 ITR Forms - PTBA (b) 1224of 9.11.20 of 1224 - Stepwise Deadlines for Timely notifying IT Return Forms - SRO 1185

2. Also refer to several Other TLQC including (a) 3376 of 5.12.25 about IT Return Form for TY 2026 sought by LTBA (b) 3271 of 17.9.25 about IT Return TY 2025: Technical Glitches and Wrong Tax Calculations - KTBA

B. Updated Commentary

1. General

Further to KQU 3753 of 21.1.26, being an Important matter, we would inform you about Systemic failures within FBR and their adverse impact on the national economy of 18.1.26 – LTBA letter to Prime Minister (Attachment 3423.1) in the ensuing paragraph, with emphasis in bold & Underline for quick reading.

With profound respect and a deep sense of national responsibility, we submit this representation to draw your kind attention to the grave, persistent, and systemic governance failures prevailing within the FBR. As the apex revenue authority of the country. the FBR's lawful, transparent. and facilitative functioning is indispensable for economic stability. investor confidence, and public trust. Regrettably, the practices presently observed within its field formations reflect serious institutional deficiencies that demand urgent and decisive intervention at the highest level.

If left unaddressed, these issues pose a serious threat to institutional credibility. voluntary compliance, sustainable revenue mobilization, and the broader reform agenda of the Government. The principal areas of concern, need immediate policy level review, are outlined below:

2. Collectively Systemic Failures

1. Chronic Delay in Notification of Income Tax Return Forms (TLQCs 3401, 3376 & 1224 refers)

2. Excessive and Unlawful Exercise of Recovery Powers

3. Unjustified Raids and Inspections

4. Arbitrary Imposition of Embargoes

5. Coercive Recovery Measures without Due Process (Several TLQCs refer including about case-laws)

6. Unlawful Recovery of Advance Tax

7. Persistent IRIS System Downtime and Operational Failures (Several TLQCs refer)

8. Deficient Digital Governance and Oversight

9. Chronic Delay in Issuance of Refunds (Several TLQCs refer)

10. Undue Hurdles in Filing Sales Tax Returns under SRO 350(1)/2024 (Several TLQCs refer)

11. Poor Quality and Arbitrary Assessment Orders

12. Issuance of Unlawful Notices for Harassment (Several TLQCs refer including about case-laws) 

13. Undue Suspension and Blacklisting of Sales Tax Registrations (Several TLQCs refer including about case-laws)

3. Overall Adverse Impact on the National Economy of Above Said Systmetic Failures

1. Discouragement of Domestic and Foreign Investment

2. Reduction in Export Competitiveness and Foreign Exchange Earnings

3. Increase in Unemployment and Business Closures

4. Narrowing of the Tax Base Instead of Broadening

5. Undermining of Fiscal Stability and Long-Term Revenue Sustainability

6. Damage to Pakistan's International Credibility in Governance and Ease of Doing Business

7. Structural Impediment to National Development

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.