KARACHI: The Karachi Tax Bar Association (KTBA) has urged the Federal Board of Revenue (FBR) to immediately address legal, operational and technical issues affecting taxpayers’ ability to file complete and accurate income tax returns for Tax Year 2026.
In letters No. KTBA/08.2026/068 dated August 10, 2026, and No. KTBA/05.2026/056 dated May 19, 2026, the KTBA had already raised concerns regarding the online return form deployed on IRIS. It said that despite these representations, several material impediments continue to affect taxpayers as the statutory filing deadline approaches.
The association said the draft Income Tax Return for Tax Year 2026 was circulated through SRO 835(I)/2026 dated May 7, 2026, under section 237(3) of the Income Tax Ordinance, 2001, while the final return form was notified through SRO 1495(I)/2026 dated September 2, 2026. It said that requiring taxpayers to file returns within approximately one month of notification of the final form does not fully accord with the legislative intent of providing a reasonable and effective period for accurate filing.
KTBA also highlighted recurring downtime and slow response times on the IRIS portal. According to the association, taxpayers and tax professionals have reported disruptions during peak filing periods as well as weekly holidays, affecting timely and accurate submission of returns.
The association further raised concerns over the extensive information required under the Tax Year 2026 return, including complete particulars of vehicle fleets, immovable properties, bank accounts, shareholders and partners in associations of persons. It said compiling, verifying, reconciling and entering this information is particularly time-consuming for individuals and businesses with multiple holdings.
KTBA noted that the burden is especially significant for large and corporate taxpayers, whose returns were not made available on the portal until August 27, 2026, while the final form was officially notified on September 2, 2026.
The association also pointed out several technical, validation and functional deficiencies in the return form. It said the incorrect computation of additional normal tax liability in cases falling under the minimum tax regime under section 153 remains unresolved despite being raised with the Board through its letter dated September 16, 2026.
KTBA said IRIS is also restricting adjustment of prior years’ tax refunds against current tax liability to Rs. 200,000, although no corresponding monetary ceiling appears to be prescribed under the Income Tax Ordinance. It called for adjustment of the full verified refund amount where the underlying payments or deductions are verifiable from FBR or MIS records.
It further said the refund application functionality for Tax Year 2026 has not been activated on IRIS and called for its immediate activation to safeguard taxpayers’ statutory rights.
The association also highlighted the absence of a downloadable filing acknowledgement after successful submission, saying a printable acknowledgement is essential evidence of timely filing and should be reinstated.
The KTBA said companies are required under section 114(2A) of the Income Tax Ordinance to submit financial statements in an electronically readable format for Tax Year 2026 and onwards. It noted that while the legal definition includes formats such as CSV and XLSX, the IRIS portal is currently accepting CSV files only and not XLSX files.
The association also objected to the continued requirement for manual entry of financial data after uploading the prescribed electronic file, saying that such duplication of effort should be eliminated or made optional.
The KTBA said members have also reported being unable to access transitional or special tax year returns on IRIS despite orders issued by Commissioners approving changes from the normal tax year to a special tax year. It urged the Board to identify and rectify any underlying systemic issue.
Another issue highlighted by the association was the inability to enter negative figures for retained earnings, including accumulated losses, in financial statements and related schedules. The KTBA said this prevents taxpayers from accurately reporting their financial position and called for immediate correction of the functionality.
The association also raised concerns over the mandatory disclosure of detailed shareholder particulars. It said the requirement creates an avoidable barrier to timely compliance, particularly for listed companies with large and frequently changing shareholder bases. It called for system-based integration or bulk-upload functionality where the information is available through regulatory or other verifiable records.
KTBA said it supports FBR’s objective of advancing digitalisation of tax administration and improving taxpayer disclosures. However, it stressed that the implementation of the initiative should be legally sustainable, proportionate, technically reliable and introduced with adequate notice.
The association said timely rectification of system deficiencies, rationalisation of disclosure requirements and adequate notice of changes are necessary to ensure that taxpayers are able to compile, verify and submit complete and accurate returns without being exposed to failed submissions, inaccurate declarations, penal consequences or denial of statutory rights.
KTBA has requested the Board to ensure stable and uninterrupted operation of IRIS throughout the filing period, provide taxpayers with a reasonable and effective period for filing returns, review and rationalise data and disclosure requirements, introduce system integration or bulk-upload facilities where practicable, and rectify all computation, validation, acknowledgement, refund and reporting deficiencies identified in its letter.
The association has requested immediate intervention and an early response from the Board, citing the proximity of the statutory deadline and the direct impact of these issues on taxpayers’ ability to properly file their returns.
