By Staff Reporter
ISLAMABAD: The Federal Board of Revenue (FBR) extended the deadline for filing income tax returns for the 2025 tax year by 16 days, setting October 31 as the new cutoff, according to a notification issued on Wednesday.
The move follows mounting pressure from trade bodies and taxpayers, as well as heightened scrutiny from the International Monetary Fund (IMF) over a significant revenue shortfall. The decision marks the second extension in recent weeks, after the FBR pushed the original deadline two weeks ago to October 15, responding to requests from various trade organizations, individual taxpayers, and tax bar associations.
Wednesday’s notification provides additional breathing room for filers grappling with compliance amid economic challenges. The FBR’s latest extension comes as Pakistan faces intense pressure to shore up its fiscal position. During recent technical-level talks with the IMF, Pakistani officials were pressed to explain the underperformance. FBR officials attributed the gap partly to Rs250 billion in unrealized recoveries tied up in pending court cases, which have bogged down the tax collection process. The shortfall prompted two downward revisions of the revenue target, underscoring the challenges facing tax administration.
Pakistan’s tax-to-GDP ratio, historically low at around 10%, remains a sticking point in its efforts to stabilize public finances. The IMF has emphasized the need for structural reforms to broaden the tax base and improve enforcement, as the country navigates a fragile economic recovery. The FBR’s decision to extend the filing deadline to October 31 aims to accommodate businesses and individuals facing logistical and economic hurdles.
Pakistan’s economy, heavily reliant on IMF support, faces multiple headwinds, including high public debt, persistent inflation, and a narrow tax base. The government has introduced a raft of new taxes in FY25 to meet IMF targets, but compliance remains a challenge in a country where only a fraction of the population files returns.
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