The Federal Board of Revenue (FBR) has unveiled a new draft electronic income tax return form that has raised eyebrows across Pakistan’s business and tax community. Despite being officially titled the “Simplified Electronic Return for Individuals,” the new form spans an extensive 25 pages, sparking debate over whether it truly eases tax compliance for individuals and businesses.
The FBR issued two key statutory regulatory orders (S.R.Os) on Tuesday: S.R.O. 1212(I)/2025, which introduces the draft income tax return form for individuals and companies, and S.R.O. 1213(I)/2025, which proposes amendments to the Income Tax Rules, 2002. These updates are intended to apply for tax year 2025 and have been published to gather feedback from stakeholders before becoming law.
According to the notifications, the FBR plans these changes under powers granted by section 237 of the Income Tax Ordinance, 2001. This legal provision allows the tax authority to amend or create rules to facilitate tax collection and compliance.
The newly proposed return form for individuals — despite its official description as “simplified” — is detailed and lengthy. Tax practitioners and business owners have expressed concern that the form’s complexity could make compliance more cumbersome rather than easier. Many small business operators, independent professionals, and even salaried individuals may struggle to navigate the detailed disclosures required across its 25 pages.
On the corporate side, the FBR has also circulated a draft of the income tax return form for companies, signaling an overhaul of how corporate tax data will be collected and processed. This is part of a broader push by the FBR to tighten tax documentation and improve transparency within Pakistan’s financial system.
Under S.R.O. 1213(I)/2025, the FBR has also proposed a set of revisions to the Income Tax Rules, 2002. These rule changes are intended to align tax procedures with evolving digital processes, paving the way for a more structured electronic filing ecosystem. This reflects the regulator’s long-standing aim to modernize Pakistan’s tax administration and reduce manual interventions.
However, critics argue that lengthier forms could discourage voluntary compliance, especially among small taxpayers who lack access to sophisticated accounting resources. In a country where tax compliance levels already remain low, such measures may unintentionally widen the gap instead of bringing more people into the formal net.
To ensure inclusivity and fairness, the FBR has invited feedback from all affected parties. Individuals, tax consultants, corporate entities, and industry associations have been given a window of seven days from the date of publication in the official Gazette to submit their comments, objections, or suggestions. The FBR has assured that it will carefully review all feedback before finalizing these changes.
This consultative approach is consistent with international best practices, where tax authorities seek stakeholder engagement to minimize unintended consequences. The move also aligns with broader efforts to digitize Pakistan’s regulatory and financial frameworks, aiming to bring more transparency and efficiency.
As Pakistan continues its drive toward a more documented economy, these reforms signal the FBR’s intent to leverage technology for tighter oversight and streamlined operations. Yet the ultimate impact will depend on how accessible and truly user-friendly these systems prove to be for everyday taxpayers.
