The Pakistan Tax Bar Association (PTBA) has asked the Federal Board of Revenue (FBR) to immediately stop what it says is unfair enforcement of Section 7E of the Income Tax Ordinance, 2001, which relates to tax on immovable properties.
In a written request, the PTBA said it has received many complaints from tax bars in Punjab and Sindh. According to these complaints, taxpayers in these provinces are being issued notices and forced to pay tax under Section 7E. However, no such action is being taken in Islamabad, Khyber Pakhtunkhwa, and Balochistan. The PTBA said this shows unequal treatment of taxpayers.
Section 7E was introduced in the Finance Act 2022. It charges tax on assumed income from property, calculated at one percent of the property’s fair market value. This law was challenged in courts across the country, and different High Courts gave different decisions.
The Sindh High Court upheld the law, but the Islamabad, Peshawar, and Balochistan High Courts declared it unconstitutional. Although appeals were filed, the Supreme Court did not suspend these decisions. After the 27th Constitutional Amendment, the cases are now pending before the Federal Constitutional Court.
Because of this situation, taxpayers in some regions are not paying the tax, while people in Punjab and Sindh continue to face action by the FBR. The PTBA said income tax is a federal tax and should be applied equally across Pakistan.
The association urged the FBR chairman to treat all taxpayers fairly and in line with the Constitution, warning that selective enforcement damages trust in the law and the tax system.
