KARACHI: The Karachi Tax Bar Association (KTBA) has submitted its comprehensive budget proposals for the fiscal year 2025–26, urging the Federal Board of Revenue (FBR) to implement wide-ranging reforms in both direct and indirect tax regimes. The aim is to build a fair, efficient, and taxpayer-centric system.
The proposals are organized in three parts: Annex A (Direct Taxes), Annex B (Indirect Taxes), and Annex C (IRIS portal improvements). The KTBA highlighted systemic inefficiencies and called for reforms to reduce litigation, ensure procedural clarity, and support economic equity.
KTBA raised strong concerns over the recent amendments introduced in May 2024 concerning the appellate framework under the Income Tax Ordinance, 2001, and Sales Tax Act, 1990. It stated that these reforms, intended to streamline the appeal process, have instead created confusion and added delays.
The association recommended a swift review of the appellate structure and proposed a resolution scheme for pending tax disputes that allows the payment of only eligible taxes, while waiving penalties and ineligible dues.
Among the key recommendations is raising the basic income tax exemption limit for individuals from Rs. 600,000 to Rs. 1,000,000, citing inflationary pressures. It also called for a reduction of the minimum turnover tax under Section 113 from 1.25% to 0.75%, providing relief to SMEs and loss-making entities.
KTBA advocated extending the system-generated barcode system—already in place for Income Tax—to Sales Tax correspondence, to curb the issuance of fake notices and improve transparency.
KTBA also detailed several technical suggestions to address glitches in the FBR’s online portal IRIS and urged improvements to enhance user experience.
The KTBA's submission reflects a proactive approach by tax professionals to shape a more equitable and administratively sound taxation environment as the country prepares for its upcoming federal budget.
