Pakistan again extends deadline for filing tax returns

Pakistan has again extended the deadline for filing income tax returns for the previous financial year after numerous complaints by tax professionals and citizens about glitches in the digital tax filing platform.

In an announcement on Wednesday, the Federal Board of Revenue (FBR) said the deadline for filing Income Tax Returns for Tax Year 2025 has been extended till October 31.

FBR said the deadline has been extended at the request of tax professionals and traders.

The date for filing tax returns starts after the close of the financial year on June 30 and runs till September 30.

Previously, the deadline was extended from September 30 to October 15 as authorities seek to increase wealth documentation for accurate taxation.

The total tax returns filed for FY25 stand at around 5.6 million, far lower than the 8 million filed for the previous fiscal year, highlighting the country’s struggle in increasing the number of filers.

The country’s tax-to-GDP ratio has remained stagnant around 9-10pc for years, resulting in chronic budget deficits which force the government to borrow money.

Over the years, the authorities have tried multiple methods, including innovation and coercion, to stimulate tax filings, but the progress remained elusive due to lax enforcement mechanisms.

Recently, the FBR introduced simplified tax returns for salaried individuals to help them file the returns easily.

Demands for extension

The bodies of Pakistan’s taxation lawyers and accountants have been demanding the extension since citizens were facing issues in filing returns on the digital platform, Iris.

Zeeshan Merchant, a tax lawyer, told Nukta that there are multiple issues with the Iris, including password errors and slow speed.

“Sometimes [taxpayers' information] appears but then vanishes after some time. People store their data, but when they try to submit the returns, the data is erased,” Merchant said while pointing out technical issues with Iris.

He gave the example of the tax charged in electricity bills, which is adjustable, but Iris is showing that as a fixed tax.

Merchant also pointed out a legal anomaly as Section 118 of the Income Tax Ordinance, 2001, allows a taxpayer to file returns in 92 days from the date when the final return form was notified by the FBR.

He added the FBR notified the return form on August 18 which leaves only 42 days for filing the returns.

The Pakistan Tax Bar Association had also written a letter to the finance minister to extend the deadline.

The association said people were unfamiliar with digital tools and needed time to file the returns.

The body said it had been calling for the use of technology for documentation since “it is the only way forward to enhance the tax to GDP ratio and the tax base”.

The letter added that due to the convenience of digital methods, more people are either willing to file tax returns or amend existing records with proper disclosure and wealth declaration.