Key Takeaways
- The Federal Board of Revenue (FBR) has proposed the creation of independent scrutiny committees.
- These committees aim to ensure only legally sound tax cases reach higher courts.
- Each committee will consist of a retired judge, a lawyer with extensive experience, and an Inland Revenue officer.
The Federal Board of Revenue (FBR) has unveiled plans for the establishment of independent scrutiny committees to review tax cases before they are taken to higher courts. This initiative is designed to reduce unnecessary litigation and enhance the quality of tax appeals in Pakistan.
Under a draft amendment to the Income Tax Rules, 2002, notified through S.R.O. 1138(I)/2026, the FBR intends to create three Independent Case Scrutiny Committees with jurisdiction across different regions of the country. The proposal is aimed at ensuring that only cases involving significant legal questions or major revenue implications are pursued before the High Courts, Supreme Court, or Federal Constitutional Court.
Each committee will comprise a retired judge from the Supreme Court, Federal Constitutional Court, or a High Court as chairperson; a lawyer with at least 15 years of experience in tax and commercial litigation; and a serving or retired Inland Revenue officer in BS-20 or above. The committees will examine whether tax cases should proceed to higher judiciary and review pending appeals to determine if continuing litigation remains in the government’s interest.
The draft amendment introduces an emergency procedure for cases approaching statutory filing deadlines. Under this, the committee chairperson may grant temporary approval for filing an appeal, subject to a full committee review within 30 days. The committee will have the authority to recommend withdrawing the case if it no longer justifies litigation.
To improve transparency, the committees will publish annual summaries of their recommendations without revealing taxpayer identities. Members will initially serve one year, with extensions based on performance. The FBR also reserves the right to remove members over conflicts of interest, misconduct, or breaches of confidentiality.
The proposed framework outlines a remuneration structure where the chairperson will receive a monthly fee of Rs. 1.2 million plus Rs. 25,000 per case, subject to a maximum of 20 cases each month. Advocate and retired Inland Revenue members will each receive Rs. 800,000 per month along with Rs. 12,500 per case.
The committees will also submit annual performance reports to the FBR detailing cases reviewed, litigation outcomes, success rates, revenue implications, and recommendations to strengthen Pakistan’s tax litigation framework.
