KARACHI: The Karachi Tax Bar Association has formally reached out to the Chairman of the Federal Board of Revenue, Rashid Mahmood Langrial, expressing serious concerns regarding the aggressive recovery of super tax liabilities.
This move follows a short order issued by the Federal Constitutional Court on January 27, 2026, which upheld the legality of super tax under sections 4B and 4C of the Income Tax Ordinance. The tax bar argues that field formations are initiating collection drives prematurely, often disregarding the mandatory thirty-day notice period required under the law.
Demand for Fair Recovery and Adjustments
The association highlighted that many taxpayers are being denied the right to adjust their super tax liabilities against pending refund claims and excess tax payments. This lack of adjustment is creating a liquidity crisis for businesses already struggling with high operating costs.
The bar association has requested the board to issue clear guidelines to ensure that recovery proceedings only begin after all pending refunds are verified and adjusted. They emphasize that a fair process would allow for procedural ease, especially for those willing to file revised returns to settle their dues.
Proposed Installment Plan for Taxpayers
In a positive development, reports suggest the board is considering a policy to allow taxpayers to pay their outstanding super tax in installments. The Karachi Tax Bar Association has welcomed this initiative, noting that it would provide much-needed relief to the corporate sector.
However, they insist that all recovery actions should be stayed until the detailed judgment from the court is released, as it will provide the necessary legal clarity on consequential matters. For now, the focus remains on ensuring that tax officials follow statutory frameworks rather than resorting to high-handed tactics for revenue collection.
