ISLAMABAD: The Federal Board of Revenue (FBR) has come under fire for declaring thousands of taxpayers “inactive” on the very first day of November 2025 — including many who had formally applied for filing extensions before the October 31 deadline.
According to tax practitioners, the FBR’s move disregards due legal procedure, as numerous extension applications remain pending and have not been decided upon. Under tax laws, a taxpayer’s status cannot be changed to inactive unless their extension request has been rejected.
The development has sparked strong criticism from affected taxpayers across the country, who argue that the FBR’s action penalises compliant individuals and businesses that followed the law by submitting extension requests on time. Many have appealed to the FBR’s Member Inland Revenue (Operations) to restore their “active” status until their applications are adjudicated.
Taxpayers also pointed out that despite the lapse of the filing deadline, the FBR has yet to upload the manual income tax return form for Tax Year 2025 — leaving several eligible filers unable to comply.
Tax lawyer Waheed Shahzad Butt urged the Federal Tax Ombudsman (FTO) to take suo motu notice of what he described as maladministration and disregard for taxpayer rights. He added that this episode reflects systemic inefficiency and elite-driven decision-making within the FBR.
Earlier, Butt had already approached the FTO to initiate contempt proceedings against FBR officials for failing to upload manual returns as required. The FTO had previously directed the FBR to immediately publish the paper return form for taxpayers with incomes below Rs1 million, who are not obligated to file electronically under Rule 73(2DD) of the Income Tax Rules, 2002.
The FTO’s earlier order stressed that the FBR “must ensure immediate upload of the manual/paper income tax return for Tax Year 2025,” but the directive remains unimplemented.
