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Government Approves Tax Law Adjustments to Reclaim Rs1.7 Trillion in Disputed Taxes

Government Approves Tax Law Adjustments to Reclaim Rs1.7 Trillion in Disputed Taxes

The federal cabinet has approved proposed amendments to Pakistan’s tax laws, aiming to streamline tax-related legal processes and enhance revenue collection efficiency. Here are the key highlights of the proposed amendments. The amendment seeks to abolish the forum of the commissioner appeals, one of the four legal platforms available to taxpayers. This change aims to simplify the appeal process and expedite resolution.

The time period for filing appeals against tax cases in high courts is proposed to be reduced from three months to just one month. This shorter timeline is intended to expedite the resolution of tax-related disputes.

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High courts will be legally bound to decide tax cases within six months, with special benches designated to handle tax matters. This measure aims to ensure timely resolution of tax disputes and reduce case backlogs. The cost of seeking justice for tax-related matters is proposed to increase by 150% for individuals and 300% for companies. This increase aims to discourage frivolous appeals and generate additional revenue.

Appellate tribunals will be strengthened by appointing members with specific qualifications, including advocates with at least 15 years of experience or senior revenue officers. This is intended to enhance the expertise and effectiveness of the tribunals.

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The proposal includes digitizing both federal and provincial budgets to improve transparency and management of development funds. Digitization aims to facilitate better control over expenditures and revenues. All pending appeals and proceedings under tax laws, including those before commissioner appeals, will be transferred to appellate tribunals. This consolidation aims to streamline legal processes and ensure uniformity in adjudication.

Special benches of high courts will hear tax cases, consisting of at least two judges. This measure aims to ensure specialized handling of tax matters and expedite decision-making. High courts may stay tax recovery subject to the deposit of a portion of the tax determined by the appellate tribunal. This provision aims to provide relief to taxpayers while ensuring compliance with tax obligations.

Overall, these proposed amendments seek to modernize tax laws, enhance efficiency in tax administration, and promote transparency and accountability in revenue collection and expenditure management.