Pakistan Business Council Flags Tax
The Pakistan Business Council (PBC) has raised concerns over a critical error in the Federal Board of Revenue’s (FBR) IRIS system, which is used for filing tax returns. According to the council, the system is incorrectly calculating tax credits, causing potential discrepancies for both individual taxpayers and businesses.
Issue Identified in IRIS System
The PBC explained that the error occurs during the calculation of allowable tax credits, leading to situations where taxpayers might be overcharged or under-credited. This could have serious implications for companies that rely on accurate tax compliance.
Sources suggest that the error mainly affects:
- Corporate taxpayers claiming tax credits
- Individual filers applying for reliefs
- Companies seeking adjustments under double taxation treaties
Why This Matters
The IRIS system is the backbone of Pakistan’s tax filing mechanism, and millions of individuals and businesses use it for annual returns. A calculation error in such a critical platform raises questions about transparency, compliance, and fairness in the taxation process.
If left unaddressed, the error could:
- Increase disputes between taxpayers and the FBR
- Delay refunds for eligible taxpayers
- Reduce trust in the digital taxation system
PBC’s Recommendations
The PBC has urged the FBR to take immediate corrective measures. Their recommendations include:
- System Audit – A comprehensive review of the IRIS system to detect calculation bugs.
- Temporary Manual Adjustments – Until the error is fixed, taxpayers should be allowed to manually adjust tax credits.
- Refund Adjustments – Ensure that taxpayers who faced excess deductions receive timely refunds.
- Stakeholder Dialogue – Regular consultations with businesses and professional bodies to prevent such issues in the future.
FBR’s Likely Response
While the FBR has not yet issued an official statement, insiders indicate that the department is reviewing the matter seriously. Since the government is pushing for digital tax compliance, resolving this glitch will be a top priority to maintain credibility.
Experts believe that if the issue is acknowledged quickly, the FBR can roll out a software patch within weeks to ensure correct tax credit calculations.
Impact on Businesses and Taxpayers
For now, businesses are advised to carefully cross-check their tax credit entries before submitting returns. Accountants and tax consultants are already reporting confusion among clients who noticed differences in expected vs. system-generated tax liabilities.
This situation has once again highlighted the importance of system testing before rolling out updates in national-level financial platforms.
Quick Details at a Glance
| Issue Raised By | Pakistan Business Council (PBC) |
|---|---|
| System Affected | FBR’s IRIS online tax filing system |
| Problem | Miscalculation of tax credits |
| Impact | Possible overcharging or under-crediting of taxpayers |
| PBC Demand | Immediate fix, manual adjustments, and refunds |
| FBR Status | Yet to issue official response |
Conclusion
The Pakistan Business Council’s flagging of the tax credit error in IRIS underscores the challenges Pakistan faces in digitizing its tax infrastructure. While automation and online filing are essential for expanding the tax base, technical glitches can erode public confidence.
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