By Staff Reporter
ISLAMABAD: The government on Friday abruptly scrapped a requirement for taxpayers to declare the market value of their assets in the 2025 income tax return form, bowing to intense pressure from tax practitioners, lawyers, and other stakeholders.
The decision, announced by the Federal Board of Revenue (FBR), comes just a day after the agency issued a robust defence of the policy, underscoring the challenges of implementing digital reforms in a largely cash-driven economy.
The income tax return form, released on July 7, had introduced a new column on page 66 requiring taxpayers to report the estimated market value of their movable and immovable assets. Since then, nearly 2.7 million taxpayers filed returns under the system, with the flexibility to either provide an estimated market value or enter zero in the designated field.
However, internal FBR analysis revealed widespread reluctance among filers to voluntarily disclose asset values, reflecting deeper resistance to financial transparency in a country where cash transactions dominate.
In response, the FBR recently adjusted its digital IRIS tax system, removing the option to enter zero and effectively mandating the disclosure of fair market values. The move sparked immediate backlash from multiple quarters, including tax professionals and legal experts, who argued it imposed undue burdens on filers.
On Thursday, the FBR issued a clarification, urging taxpayers to report asset values “in good faith” and assuring them that the disclosures would not trigger additional taxation, require supporting documentation, or lead to tax notices. Yet the controversy showed no signs of abating.
Prompted by the outcry, Prime Minister Shehbaz Sharif formed a high-level committee on Thursday, chaired by Law Minister Azam Nazeer Tarar, to review the asset valuation requirement.
The committee, which included the minister for petroleum, the minister of state for finance, the attorney general for Pakistan, the special assistant to the prime minister on coordination, the finance secretary, the FBR chairman, and its member customs, was tasked with assessing the provision’s legal and administrative implications.
On Friday, the committee convened with senior tax officials to evaluate the measure. “The requirement to declare the true market value of assets is firmly embedded in the income tax law,” a senior tax official said. The official noted that many taxpayers remained hesitant to disclose accurate asset values, highlighting broader challenges in fostering financial transparency.
After extensive deliberations, the committee recommended scrapping the asset valuation column to simplify the tax filing process, according to an FBR statement. Prime Minister Sharif swiftly approved the recommendation, and the FBR announced the removal of the “Estimated Fair Market Value” column from the 2025 income tax return form.
The FBR clarified that the column was introduced solely for data collection to support the annual Economic Survey and had no impact on income or tax liability assessments. “In line with the premier’s directives and considering the difficulties faced by taxpayers,” it’s said in a statement. The column was withdrawn to ease compliance burdens.
The decision marks a rare concession by the government, which has been under pressure to boost revenue collection and meet fiscal targets tied to a $7 billion International Monetary Fund bailout program. Documenting the cash economy remains a priority, but the backlash over the asset valuation rule underscores the challenges of implementing reforms in a system accustomed to opacity.
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