By Staff Reporter
ISLAMABAD: The government has granted tax authorities sweeping powers to seize bank accounts, properties, and seal businesses without prior notice, immediately following rulings from the country’s superior courts to recover unpaid taxes.
The Tax Laws (Amendment) Ordinance, 2025, signed by President Asif Ali Zardari and effective May 2, empowers the Federal Board of Revenue (FBR) to recover disputed taxes within hours of superior court rulings. Officials can attach and sell taxpayers’ assets, access bank accounts, or deploy personnel to monitor production and stock at business premises.
Courts and tribunals cannot suspend recovery during appeals, leaving taxpayers exposed to swift enforcement.
A new Section 138(3A) in the Income Tax Ordinance mandates immediate tax payment post-ruling, overriding prior legal buffers like Section 137 or judgments such as the Pakistan LNG case. Section 140(6A) further enables direct bank account seizures.
Courts and tribunals are now prohibited from suspending tax recovery during appeals. This prevents taxpayers from delaying payments while contesting liabilities, enabling the FBR to pursue coercive actions even as legal challenges proceed.
Under a new sub-section, 3A, added to Section 138 of the Income Tax Ordinance, taxes assessed against a taxpayer become immediately recoverable or payable upon the expiry of notice periods outlined in Sections 138 or 140, overriding prior provisions like Section 137 or judgments such as the Pakistan LNG ruling by the Islamabad High Court. This eliminates previous buffers that allowed taxpayers time to settle dues or appeal without enforcement.
The ordinance significantly strengthens the FBR’s enforcement capabilities. Officials are now authorized to attach and sell any movable or immovable properties of taxpayers to recover outstanding dues. Additionally, the FBR can deploy officers to business premises to monitor production, supply chains, and unsold stock.
The government hopes the ordinance will unlock funds tied up in legal disputes. Media reports said the law, enacted outside the upcoming budget session, targets billions in disputed taxes. Pakistan faces an Rs830 billion shortfall against its Rs12.97 trillion tax target for the fiscal year, with two months remaining. Prime Minister Shehbaz Sharif had aimed to recover Rs400 billion from pending cases, but only Rs36 billion has been secured, mostly from a windfall tax case. Hopes for Rs120 billion from a super income tax case, including Rs100 billion in April, remain unfulfilled.
The ordinance further empowers the FBR to authorize any federal or provincial government employee to seize and confiscate goods sold without valid tax stamps, bar codes, banderoles, stickers, labels, or other required identifiers,expanding enforcement under the Federal Excise Act.
Zardari’s late-hour ordinance—one of four issued ahead of Monday’s National Assembly session—includes the Federal Ministers and Ministers of State (Salaries, Allowances and Privileges) Amendment Ordinance, 2025, aligning ministerial pay with National Assembly members from January 2025, and the National Agri-Trade and Food Security Authority Ordinance, 2025, establishing a regulatory body to oversee agricultural trade, enforce food safety standards, and coordinate with provinces. The agri-trade authority will operate under a Board of Governors, appoint a director general, and set up testing labs to monitor imports and exports.
Copyright © 2021 Independent Pakistan | All rights reserved
