The Federal Board of Revenue (FBR) has once again extended the deadline for filing income tax returns—this time from September 30 to October 30—claiming it aims to facilitate taxpayers and improve compliance. The move has become a familiar annual ritual. In past years, the FBR has continued granting such extensions month after month, often well into the following year.
That the first extension was announced just hours before the original deadline expired—despite repeated warnings from the Board that no relief would be offered—came as no surprise. As always, the FBR justified its decision by citing appeals from trade bodies, tax bar associations, and members of the public.
Legally, these extensions are made under the Income Tax Ordinance, 2001, which empowers the FBR to grant more time if taxpayers face genuine hardship. In theory, this provision protects citizens from penalties due to circumstances beyond their control.
However, the issue runs deeper. While extensions are meant to enhance compliance, they often achieve the opposite. Experts argue that they erode the FBR’s authority and encourage a culture of procrastination. Historical data shows that such relief measures have done little to expand Pakistan’s tax base.
A study by economist Muhammad Khudadad Chatta examined the effects of deadline extensions between 2007 and 2017 in Pakistan—a country already struggling with low compliance and a narrow tax base. The findings revealed that when deadlines are extended, individual taxpayers delay filing by around 88 percent of the extension period, while unincorporated businesses delay by 70 percent. More importantly, overall compliance actually drops, as the additional time merely encourages postponement rather than participation.
The study concludes that repeated extensions delay revenue collection, weaken respect for official deadlines, and fail to bring new taxpayers into the system.
FBR Chairman Rashid Langrial has openly expressed his opposition to extending deadlines, attributing the recurring need to taxpayers’ habitual procrastination. “Human beings are slaves of their habits; we act only when the deadline is about to expire,” he said. “When everyone tries to file at the last moment, the system crashes. To prevent that, we’re left with no choice but to extend deadlines.”
While taxpayer procrastination plays a part, technical and administrative inefficiencies are far greater culprits. Frequent IT glitches, delays in updating the Iris portal, and sudden mid-cycle changes to tax return forms routinely make timely filing impossible.
Tax expert Dr. Ikramul Haq links the recurring extensions to the government’s practice of making sweeping changes to tax laws during the filing period. “This doesn’t happen anywhere else,” he observed. “Other countries keep their tax policies stable and simple so taxpayers can file without confusion.”
He further explained that the law requires the FBR’s online filing system to be fully operational by July 1, the start of the fiscal year. In reality, the updated return format and portal often remain unavailable well into late September. “This damages public trust and creates chaos when everyone rushes to file in the final week, overloading the system,” he added.
Dr. Haq also criticised parliament for delegating excessive lawmaking power to the executive. “In which democratic country do legislators hand over their lawmaking powers to the bureaucracy? It’s unthinkable,” he remarked. This abdication, he said, reflects lawmakers’ indifference toward tax reform and compliance.
Because of this delegated power, the FBR frequently changes return formats and requirements—creating confusion year after year. In contrast, many developed countries issue pre-filled tax returns that require minimal input from taxpayers.
Dr. Haq also highlighted structural disconnects within the FBR. “PRAL [Pakistan Revenue Automation Ltd], which manages the FBR’s IT systems, operates too independently,” he noted. “This lack of coordination between policy, operations, and IT creates major bottlenecks.”
He cited a recent case involving taxpayer Mansoor Beg, who reported calculation errors in the Iris system. The software incorrectly computed the surcharge on Association of Persons (AOP) income under Section 4AB of the Income Tax Ordinance, 2001—effectively taxing the same income twice. Because key fields were locked, taxpayers couldn’t correct the issue or contest it.
When the FBR failed to respond, Beg lodged a complaint with the Federal Tax Ombudsman (FTO), arguing that the system’s restrictions violated taxpayers’ rights. The FBR later admitted to the error and said a Change Request Form had been submitted to PRAL to fix the problem. Yet, as of October 22, the bug persisted.
According to the FBR’s Director General (IT), PRAL still hadn’t implemented the correction, prompting the FTO to demand a compliance report. “This,” concluded Dr. Haq, “shows how dysfunctional and inefficient the country’s tax machinery has become.”
