Abdul Ghani

The Federal Board of Revenue (FBR) has proposed making electronic filing of income tax returns and withholding statements mandatory for all individuals under a draft amendment to Pakistan’s Income Tax Rules, 2002. The move is part of the government’s efforts to modernize the tax system and enhance efficiency through digitalization.

The draft notification, S.R.O. 2070(I)/2025, issued on November 3, 2025, seeks to amend Rule 73 of the Income Tax Rules to require all individual taxpayers to file their tax returns and withholding statements electronically. The proposed provision states, “In case of an individual, electronic filing of income tax return and withholding statement shall be mandatory.” If approved, the amendment will eliminate the option for manual filing of tax returns, aligning Pakistan’s tax procedures with international best practices.

The new sub-rule (2DD) proposed in Rule 73 would have wide-ranging implications for taxpayers across the country. It would apply to all individuals, regardless of income or profession, requiring them to use the FBR’s e-filing platform for submitting tax documents. According to officials, this transition to a fully digital system aims to simplify the tax process, reduce human error, and increase transparency. The shift is also expected to minimize manual intervention, which has often been a source of delays and discrepancies in the past.

The draft notification includes a public consultation clause, allowing stakeholders to provide feedback before final approval. It states, “Objections or suggestions received, if any, before the expiry of the aforesaid period, shall be taken into consideration by the Federal Board of Revenue.” Taxpayers have seven days from the publication date —until November 10, 2025—to submit their comments or objections. The FBR will review the feedback before finalizing the amendment.

The proposed rule marks a significant shift for individuals who have relied on manual filing. All taxpayers will now be required to register on the FBR’s e-filing system and familiarize themselves with the online process. This change will help the FBR maintain a more organized and accessible database of taxpayers, improving compliance monitoring and reducing administrative burdens. Taxpayers are advised to ensure their registration details and digital records are accurate and up to date to avoid any filing issues.

This initiative forms part of Pakistan’s ongoing efforts to digitalize its tax administration. Since 2020, the FBR has introduced several online services, including the launch of its income tax e-filing portal. The success of these initiatives has set the stage for more comprehensive digital reforms. Globally, many countries have adopted similar systems to enhance efficiency, cut costs, and improve transparency in tax administration. Pakistan’s move to mandatory e-filing is seen as a step toward aligning with these international standards.

The proposed amendment signals a decisive move toward a paperless tax environment. By making electronic filing compulsory, the FBR aims to standardize the filing process and foster a more accountable, transparent, and efficient tax system. Taxpayers are encouraged to stay informed about the upcoming changes and prepare for full digital compliance once the new rule is formally approved.

Credit: INP-WealthPk