Tax Practitioners Highlight Refund, Wealth Statement and Return Filing Problems
Taxpayers and tax practitioners have identified 17 major issues in Pakistan’s digital income tax filing system, raising concerns about refunds, wealth statements, business capital and return revisions.
The problems were discussed during a meeting between the Karachi Tax Bar Association and Pakistan Revenue Automation Limited.
Several technical issues were resolved during the meeting.
Other proposed reforms have been referred for consideration in future tax years, particularly Tax Year 2027.
The discussions covered income tax returns, wealth statements, refunds, previous-year data and property declarations.
Issues involving business capital, advance tax adjustments and automatically populated withholding tax information were also reviewed.
One of the most significant concerns involved tax refunds.
The KTBA said the existing return form does not always allow taxpayers to adjust available refunds against their current-year tax liability.
The association also urged authorities to activate the refund application facility for Tax Year 2026 without unnecessary delays.
Tax practitioners warned that delays in refund processing can create cash-flow problems for taxpayers and businesses.
They called for a more efficient digital mechanism that allows eligible taxpayers to use available refunds against outstanding liabilities.
Property and Business Capital Reporting Gaps Raise Audit Concerns
The KTBA also highlighted weaknesses in the current Wealth Statement.
According to the association, the form does not provide a clear field for declaring advance or installment payments made for properties purchased from builders and developers.
This can create reporting difficulties for taxpayers who have paid significant amounts toward properties that have not yet been transferred into their names.
The tax bar warned that the issue could become more serious as the Federal Board of Revenue expands automated systems and faceless audits.
Incomplete or unclear declarations could result in discrepancies between taxpayer records and information available to tax authorities.
PRAL said the proposal for a dedicated property advance-payment field would be considered for Tax Year 2027 return forms.
Business capital reporting was another major issue.
The current system reportedly does not properly carry forward business capital if a taxpayer records no business income during a particular year.
The platform also lacks separate fields for taxpayers operating more than one business.
The KTBA called for the restoration of separate business capital declarations.
PRAL said that proposal would also be considered for Tax Year 2027.
Tax practitioners argued that clearer business capital reporting would reduce errors and improve consistency between current and previous tax returns.
Previous-Year Data, Excel Upload and Return Revision Features Under Review
The KTBA also called for improvements to the previous-year data import facility.
Taxpayers currently face difficulties retrieving and reusing information from earlier filings.
The association requested an option allowing users to import information from the latest filed return instead of relying on an earlier original return.
It also proposed introducing an Excel upload feature.
Such a facility could reduce manual data entry and make large or complex tax returns easier to prepare.
The KTBA pointed to the existing sales tax system, where spreadsheet-based uploading is already available in certain areas.
PRAL said both proposals would be considered for future tax years.
Problems were also reported with revisions to Tax Year 2026 income tax returns.
Although the IRIS portal provides an option for return revision, tax practitioners said the functionality remains limited.
The KTBA called for the revision facility to be fully restored in line with Section 114 of the Income Tax Ordinance, 2001.
The meeting also discussed the current 15-day waiting period before the system issues an order under Section 120.
Tax practitioners said this delay can affect the ability of taxpayers to revise returns or claim refunds in a timely manner.
Withholding Tax and Automated Calculations Also Draw Complaints
The meeting also examined issues involving withholding tax entries and automated calculations.
The KTBA said incorrect classification by withholding agents can result in inaccurate tax calculations appearing in taxpayer records.
Such errors can force taxpayers to spend additional time correcting information that was automatically populated by the system.
Minimum tax calculations were also discussed.
Tax practitioners called for greater accuracy and transparency in how the system calculates tax liabilities.
Financial statement reporting was another area of concern.
The KTBA said taxpayers should not be required to repeatedly enter financial statement information manually where electronically readable documents have already been submitted.
The association argued that better integration between digital records could reduce duplication and filing errors.
Tax residency information was also included among the issues raised during the meeting.
PRAL Resolves Several Problems, More Changes Expected in 2027
Several technical concerns were resolved during discussions between PRAL and the tax bar.
These included problems relating to acknowledgment receipts.
Issues involving partnership capital percentages were also addressed.
PRAL also resolved complaints about duplicate property entries appearing in taxpayer records.
Another clarification involved vehicle information in Wealth Statements.
PRAL confirmed that vehicle chassis numbers are not mandatory.
The relevant field has now been made optional.
The remaining proposals will be evaluated for future tax years.
The discussions highlight growing pressure on tax authorities to improve Pakistan’s digital filing infrastructure as more compliance processes move online.
Tax practitioners say a more reliable system could reduce errors, lower compliance costs and make tax filing easier for individuals and businesses.
The proposed reforms for Tax Year 2027 are expected to focus on improving automation, data accuracy and user access across the IRIS system.
