KCCI urges FBR to fix tax filing issue for returning residents

The Karachi Chamber of Commerce and Industry (KCCI) has urged the Federal Board of Revenue (FBR) to fix a restriction in its online tax filing system that is causing difficulties for some people who become Pakistani tax residents again after living abroad.

KCCI President Talat Mahmood raised the issue in a letter to FBR Member Inland Revenue–Operations Zubair Bilal, calling for changes to the IRIS portal's Wealth Reconciliation module for Tax Year 2026.

According to Mahmood, the system automatically carries forward a taxpayer's wealth balance from their last filed statement and does not allow them to change it.

This creates problems for people who were not required to file wealth statements while they were non-residents but must submit them after becoming Pakistani tax residents again.

Why are returning residents facing problems filing tax returns?

The problem arises when IRIS uses an old wealth balance as the starting point for a new tax year. Returning residents who were not required to file wealth statements during their years of non-residence cannot update that figure, making it difficult to accurately reconcile their wealth for the current tax year.

Mahmood illustrated the issue with the example of someone who filed a wealth statement for Tax Year 2023, remained a non-resident during Tax Years 2024 and 2025, and became a resident again in Tax Year 2026.

Although the individual was not required to submit wealth statements during the intervening years, IRIS continues to use the balance recorded for 2023.

The taxpayer cannot enter the appropriate opening balance for 2026, potentially creating discrepancies and delaying the filing process.

Under Section 116(2) of the Income Tax Ordinance, 2001, resident individuals filing income tax returns must also submit wealth statements and wealth reconciliation statements.

These documents report a taxpayer's assets and liabilities and explain changes in their wealth.

What changes has KCCI requested?

KCCI has asked the FBR to modify the IRIS system so eligible returning residents can enter an appropriate opening wealth balance for the relevant tax year.

Mahmood stressed that the proposed change should apply only to individuals who were not legally required to file wealth statements during the intervening years.

He clarified that the chamber was not seeking a general exemption from wealth declaration requirements or any relaxation for taxpayers who were already required to submit the statements.

KCCI also called on the FBR to involve its technical team, including Pakistan Revenue Automation (Private) Limited (PRAL), in modifying the portal's validation mechanism.

The proposed facility would remain subject to applicable legal requirements and verification where necessary.

Mahmood said the change would allow eligible taxpayers to reconcile their wealth for the current year without having to account for intervening years in which they had no legal obligation to file wealth statements.

He urged the FBR to resolve the issue on a priority basis to help affected taxpayers meet their Tax Year 2026 filing obligations accurately and on time.