KTBA Voices Concerns Over FBR Practices in Karachi

The Karachi Tax Bar Association (KTBA) has voiced serious apprehensions regarding the methods employed by Federal Board of Revenue (FBR) field offices located in Karachi. The association contends that these practices are disrupting business operations and hindering adherence to legal standards.

In a formal communication addressed to the federal finance minister and the FBR chairman, the KTBA stated that the processing of new sales tax registrations has been effectively suspended for the last half-year. This alleged cessation is creating significant obstacles for enterprises attempting to fulfill their mandated obligations.

The association further asserted that field offices are requesting documentation that violates Section 14 of the Sales Tax Act, 1990, along with its associated regulations.

The KTBA stated that field operations are exceeding their legal authority, imposing unwarranted demands on taxpayers seeking registration. They added that such delays are creating adverse financial consequences for new ventures.

The tax bar also expressed concern over what it described as inconsistent procedures for suspending or blacklisting registered businesses. The KTBA claims these actions disregard Supreme Court rulings in key cases, namely Eagle Cables (CPLA 2400-L/2022) and Skypak Enterprises (CPLA 682/2017).

The letter also mentioned that these operational methods have led to widespread discontent among the business sector, with some situations reportedly resulting in problematic encounters at field offices. The KTBA cautioned that these problems are damaging confidence in the FBR’s institutional integrity and fostering conditions that could encourage exploitation and unethical practices.

The KTBA stated that earlier attempts to communicate with the FBR in early March were unsuccessful. The association views recent extensions to sales tax return filing deadlines as an implicit recognition of functional instability within the tax administration framework.

The KTBA has urged immediate action focusing on: restarting new sales tax registrations with defined timelines, stopping arbitrary suspension protocols, and proactively engaging relevant parties to find solutions for these ongoing challenges.