FBR Granted Sweeping Powers for Immediate Tax Recovery

Islamabad, May 4, 2025 – President Asif Ali Zardari has enacted the Tax Laws (Amendment) Ordinance, 2025, granting the Federal Board of Revenue (FBR) extensive authority to recover outstanding taxes directly from bank accounts and seize movable or immovable assets without issuing additional notices. The ordinance enables immediate enforcement following court rulings in favor of the FBR.

Under the new law, the FBR is no longer required to serve fresh notices before initiating tax recovery, bypassing the procedural requirements of Section 138 of the Income Tax Ordinance, 2001. Additionally, tax officials can now be stationed at business and manufacturing premises to monitor production, inventory, and supply chains.

Swift Implementation and Initial Cases

Shortly after the ordinance’s enactment, the FBR launched recovery operations against companies with court-ordered tax liabilities. The first entity affected was Telenor Pakistan (Private) Limited, which agreed to settle its multi-billion-rupee tax dues following an Islamabad High Court (IHC) ruling.

In an official statement, Telenor Pakistan reaffirmed its commitment to legal compliance, stating:
"As a responsible corporate entity and a major contributor to the national exchequer, we remain dedicated to following all applicable laws and regulations. While discussions with the FBR continue, we reserve the right to pursue legal remedies as necessary."

Another telecom-related joint venture also agreed to pay its outstanding tax dues as per court directives.

Jazz and Deodar’s Tax Settlement

Meanwhile, Jazz reached an agreement with the FBR to pay Rs. 20 billion in taxes related to the import of telecom infrastructure, opting not to pursue further litigation. Deodar, Jazz’s subsidiary responsible for telecom towers, was previously sold to Engro Corporation in a $563 million deal approved by the Competition Commission of Pakistan. However, the transaction remains stalled due to unresolved legal matters.

In response to reports, Jazz clarified that neither Pakistan Mobile Communications Limited (PMCL-Jazz) nor Deodar had received an adverse court ruling. The company stated:
"PMCL has consistently fulfilled its tax obligations in accordance with the law. We remain committed to compliance while ensuring our rights under the Constitution of Pakistan."

Concerns Over Expanded FBR Authority

The ordinance has sparked debate among business leaders and legal experts, with concerns over its potential impact on corporate operations and investment confidence. By allowing immediate tax recovery without prior notification, the law significantly strengthens the FBR’s enforcement capabilities.

As businesses navigate the implications of this new regulation, further developments are expected in the coming weeks.