ISLAMABAD: The Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to adjust taxpayers’ pending refund claims before initializing the recovery of Super Tax. The directive aims to ensure that taxpayers are not required to pay additional taxes while their valid refunds are still pending.
According to official details, the FTO directed the FBR to issue clear instructions to all Inland Revenue offices across Pakistan. The directive states that Super Tax should only be recovered after verifying and adjusting any pending refund claims submitted by taxpayers.
Complaint Over Delayed Refund
The directive was issued while the FTO was reviewing a complaint from a taxpayer about the delay in receiving an income tax refund of Rs4.506 million for Tax Year 2024. The taxpayer had filed the tax return and later applied for the refund through the FBR’s online system.
According to the complaint, the refund application was submitted on August 13, 2025, but the tax department failed to process it within the legally required timeframe. The taxpayer also sent reminders in December 2025 and January 2026, yet the refunds remained pending.
Super Tax Demand Issued
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During the proceedings, it was found that the tax authorities had also issued a Super Tax demand of Rs1.548 million for the same tax year under Section 4C of the Income Tax Ordinance, 2001. The taxpayer asked that the pending refund be used to offset this tax demand to prevent any recovery action.
However, a departmental official told the FTO that the tax department had been informally collecting Super Tax in cash without adjusting pending refunds. The official could not provide any legal provision supporting such policy.
Orders to Inland Revenue Officials
The FTO also directed the Commissioner Inland Revenue (Refund Zone), Regional Tax Office Faisalabad to decide the taxpayer’s refund application according to the law very strictly. The official has been instructed to give the taxpayer an opportunity to be heard and submit a compliance report within 45 days.
Implications for Taxpayers
Experts believed that the decision could affect taxpayers across Pakistan who face similar situations, where refunds are delayed while tax demands are issued. The directive emphasizes that the tax authorities must process and adjust valid refunds before recovering any additional taxes.
