Taxpayers and tax practitioners have identified 17 issues in Pakistan’s digital income tax filing system, prompting discussions with Pakistan Revenue Automation Limited over fixes and potential changes to future tax return forms. The concerns were raised during a meeting between Karachi Tax Bar Association and Pakistan Revenue Automation Limited, covering several areas of the digital filing process, including income tax returns, wealth statements, refunds, previous year data, property declarations, business capital, advance tax adjustments and automatically populated withholding tax information. Several issues were addressed during the meeting, while other proposed changes have been referred for consideration in Tax Year 2027.
One of the major concerns raised by the tax bar relates to tax refunds. Karachi Tax Bar Association said the existing return form does not consistently allow available refunds to be adjusted against the current year’s tax liability. It also called for the refund application facility for Tax Year 2026 to be activated without unnecessary delays. Another issue involves property declarations in Wealth Statements, where taxpayers currently do not have a clear field to report advance or installment payments made toward properties purchased from builders and developers. The tax bar noted that this gap could result in discrepancies as Federal Board of Revenue expands the use of faceless audits and automated tax systems. Pakistan Revenue Automation Limited said the proposal would be considered for the Tax Year 2027 return forms.
The digital filing system also faces issues concerning business capital, previous year information and revised tax returns. According to the tax bar, business capital is not properly carried forward when taxpayers have no business income during a particular year, while the system does not provide separate fields for individuals operating multiple businesses. Pakistan Revenue Automation Limited said a proposal to restore separate business capital declarations would be considered for Tax Year 2027. Karachi Tax Bar Association also requested a more accessible previous year data import facility, including an option to retrieve information from the latest filed return instead of an earlier original filing. It further proposed an Excel upload facility to reduce manual data entry, similar to the functionality available for sales tax returns. The revision process for Tax Year 2026 returns was also discussed, with the tax bar seeking restoration of functionality in line with Section 114 of the Income Tax Ordinance, 2001. The association also questioned the existing 15 day waiting period for the system to issue an order under Section 120, stating that delays can affect taxpayers seeking to revise returns or claim refunds.
Other concerns discussed during the meeting included withholding tax information, minimum tax calculations, financial statement data and tax residency. Karachi Tax Bar Association said taxpayers may encounter incorrect calculations or information when withholding agents incorrectly categorize taxes. It also called for a reduction in manual financial statement data entry where electronically readable files are already being submitted. Several problems were resolved during the meeting, including issues related to acknowledgment receipts, partnership capital percentages and duplicate property entries. Pakistan Revenue Automation Limited also clarified that vehicle chassis numbers are not mandatory in Wealth Statements and said the relevant field had been made optional. The discussions reflect ongoing efforts to address operational problems in Pakistan’s digital tax filing infrastructure, with some changes being implemented immediately and other proposed reforms being considered for future tax years.
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