Pakistan approves plan to reform tax dispute resolution mechanism

Prime Minister Shehbaz Sharif has approved a six-point action plan to reform the tax dispute resolution process in Pakistan.

The approval came during a meeting chaired by the prime minister on Tuesday to review ongoing reforms at the Federal Board of Revenue.

The initiative aims to modernize the Federal Board of Revenue (FBR) by establishing a centralized litigation system and committees for case scrutiny. Sharif reviewed these reforms during a high-level meeting focused on accelerating the recovery of stuck revenue.

How will the new tax dispute resolution plan work?

The plan introduces a Centralized Litigation Management System (CLMS) to digitize and organize tax data for accurate reporting.

Officials stated this digital platform will enable the FBR to track cases effectively and ensure timely follow-ups. The prime minister also directed the FBR legal wing to hire qualified professionals strictly based on merit.

Under the new plan, scrutiny committees will be set up to evaluate legal battles. Meanwhile, officials’ performance ratings have been linked to case outcomes. These measures aim to reduce the judicial burden by strengthening the Alternative Dispute Resolution system for faster settlements.

The prime minister instructed officials to provide clear timelines for implementing the approved reforms. He emphasized that a stronger Alternative Dispute Resolution (ADR) system is essential for the swift resolution of legal conflicts.

This strategy seeks to expedite decisions and prevent tax revenue from being locked in long-term court battles.

The PM said ongoing digitization efforts within the FBR are already producing positive results for the national exchequer.

He commended task force head Shad Muhammad Khan for his role in developing the reform report. The government expects these structural changes to improve taxpayer confidence and foster voluntary compliance nationwide.

During the meeting, officials reported that the ADR forum has recovered 24 billion PKR for the government this year.

The prime minister noted that digitizing the FBR will continue to be a priority for his administration. These reforms align with recent legislative changes designed to create a more transparent and fair fiscal environment.