The Federal Board of Revenue (FBR) has notified a series of draft amendments to the Income Tax Rules, 2002 through four separate statutory regulatory orders issued on October 6, 2026. The proposed changes cover tax compliance requirements for non-resident ship owners and charterers, automated scrutiny of income tax returns, conditions for late filers seeking inclusion in the Active Taxpayers’ List, and tax credits for resources used to integrate systems with the FBR. The notifications, issued as S.R.O. 1689-1692(I)/2026, introduce additional digital processes through the IRIS tax system and connect several compliance procedures with electronic records and data received from other government platforms.
Under S.R.O. 1689, the FBR has proposed changes to Rule 37 concerning non-resident ship owners and charterers under Section 143 of the Income Tax Ordinance. The proposed procedure requires the relevant return to be filed electronically through IRIS, with the return generated automatically according to the Vessel Identification Report (VIR). Data relating to vessels will be transmitted to IRIS through the Pakistan Single Window (PSW), creating a direct electronic flow of information for the tax filing process. The proposed framework also links tax payment with the submission of the return. Payments will be made through a Payment Slip ID (PSID) and reflected through a Computerised Payment Receipt (CPR), while the return cannot be submitted until all relevant payments have been linked.
The proposed shipping-related rules also introduce specific conditions for seeking an extension. An extension application would have to be filed before the vessel’s departure, accompanied by acceptable security such as a bank guarantee, pay order or post-dated cheque. The security would be subject to a maximum period of 30 days from the date of departure. The draft further provides that recovery proceedings may be initiated against the authorised shipping agent where the applicable tax obligations are not fulfilled. The changes therefore place greater responsibility on the electronic filing process as well as on authorised representatives involved in the tax affairs of non-resident shipping operators.
S.R.O. 1690 proposes a new Rule 38B under Section 120(2A), introducing an automated scrutiny mechanism for income tax returns. Under the proposed rule, the FBR’s system, including its Computerised Risk Management (CRM) capabilities, would identify discrepancies in returns and provide taxpayers with advance intimation through IRIS. Taxpayers would be given at least seven days to respond to the identified discrepancies, followed by a reminder providing another period of at least seven days. The record would then be forwarded to the relevant jurisdictional Inland Revenue Officer, who would consider the taxpayer’s response and proceed accordingly. The proposed mechanism is designed to provide taxpayers with an opportunity to address or rectify discrepancies before the matter moves toward legal or penal action.
Another significant amendment has been proposed through S.R.O. 1691, which introduces changes to Rule 81B under Section 182A(3) concerning the Active Taxpayers’ List. The proposal would allow individuals who file their income tax returns late to be included in the Active Taxpayers’ List without paying the applicable surcharge, subject to a new condition. A late filer seeking this benefit would have to submit an undertaking through the newly prescribed Form ATL-U on IRIS. The undertaking would confirm that the individual will not purchase or acquire any property for six months from the date of acknowledgement issued through IRIS.
The FBR would have the authority to verify compliance with the undertaking using third-party information and other available data. If a breach is identified, the taxpayer would first be given an opportunity for a hearing. If the violation is established, the benefit of inclusion in the Active Taxpayers’ List under this arrangement would be withdrawn from the date on which the breach occurred. The proposed framework therefore provides a route for certain late filers to obtain ATL status without surcharge, while attaching a six-month restriction on property purchases or acquisitions as a condition for receiving that relief.
The fourth notification, S.R.O. 1692, proposes a new Rule 33U under Section 64D relating to a tax credit for resources used to integrate systems with the FBR. The provision would apply to persons required to carry out integration under the Income Tax Ordinance, Sales Tax Act or Federal Excise Act. To qualify, the relevant resource would have to be installed and integrated during the tax year and used exclusively for the required integration. The taxpayer would also need to maintain an FBR activation or integration record, along with the relevant invoice and proof of payment.
The proposed tax credit would not cover several categories of expenditure, including maintenance costs, internet expenses, salaries, training expenses and refundable taxes. The draft rule would also prevent taxpayers from claiming the same expenditure twice for tax purposes. The provision is intended to establish a defined framework for recognising qualifying integration-related resources while limiting the credit to costs that directly meet the prescribed requirements.
The FBR has also set different periods for stakeholders to submit objections or suggestions on the proposed amendments. For S.R.O. 1689, S.R.O. 1691 and S.R.O. 1692, objections or suggestions are to be submitted within seven days from publication of the respective notifications in the Gazette. A shorter period of three days has been prescribed for S.R.O. 1690 concerning automated scrutiny. The draft amendments collectively indicate a stronger reliance on electronic tax records, automated identification of discrepancies and data integration between government systems.
The proposed changes would affect several areas of tax administration, from shipping-related filings and late-filer treatment to automated scrutiny and digital integration incentives. For late filers, the proposed ATL relief would come with a clear six-month restriction on property acquisition, while taxpayers receiving automated discrepancy notices would need to respond within the prescribed timeframe to address issues before further action is considered. Meanwhile, the proposed integration credit would establish conditions for businesses and other taxpayers required to connect their systems with the FBR.
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