The government has introduced the Tax Law Amendment Bill of 2024 in the National Assembly, which aims to limit the authority of the Commissioner Inland Revenue (Appeals) in handling income tax, sales tax, and federal excise duty appeals. According to the bill, the Commissioner Inland Revenue (Appeals) will only address appeals up to certain monetary thresholds: Rs20 million for income tax, Rs10 million for sales tax, and Rs5 million for federal excise duty.

The proposed bill does not eliminate the position of the Commissioner Inland Revenue (Appeals). However, any income tax appeal exceeding Rs20 million, as well as sales tax appeals above Rs10 million and federal excise duty appeals above Rs5 million, will be transferred to the Appellate Tribunal Inland Revenue (ATIR) for a decision within six months.

Federal Minister for Law and Justice Azam Nazeer Tarar presented the Tax Law Amendment Bill of 2024 in the National Assembly, which seeks to amend certain tax laws. The bill suggests curtailing the jurisdiction of the Commissioner Inland Revenue (Appeals). Taxpayers will now directly challenge FBR’s orders that surpass the specified amounts before tribunals.

All pending cases with the Commissioner Inland Revenue (Appeals) that exceed the aforementioned limitations will be transferred to the IR tribunals, and these cases will be decided within six months of the transfer from the Commissioner Inland Revenue (Appeals).

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Appeals to the Tribunal and references to the High Court must now be filed within 30 days of receiving the order. Additionally, the High Court will be required to decide on the reference within six months of its filing.

According to the bill, all cases transferred from the Commissioner (Appeals) to the Appellate Tribunal should be decided by the Appellate Tribunal within a specified period, starting from June 16, 2024.

The minister emphasized that there are currently tax cases totaling Rs2,700 billion pending in various appellate forums, including Commissioners’ Appeals, Appellate Tribunals, High Courts, and the Supreme Court of Pakistan.

The purpose of the Tax Laws (Amendment) Act of 2024 is to implement the federal government’s taxation proposals and resolve a significant number of pending appeals before the Commissioner Inland Revenue (Appeals) and Appellate Tribunals.

The Appellate Tribunal Inland Revenue (ATIR) is the final fact-finding authority in the appellate hierarchy established in fiscal statutes. Due to factors such as arbitrary constitution of benches, insufficient number of benches, delays in case scheduling and resolution, a substantial amount of revenue, approximately Rs2 trillion, is tied up in litigation before the ATIR. Federal Minister for Law and Justice Azam Nazeer Tarar stated that the government is open to suggestions from the opposition and other stakeholders regarding the bill.

He also emphasized the need to expand the tax base for the country’s economic strengthening. The proposed bill has been discussed with the Tax Bar Association.

Opposition Leader in the National Assembly Omar Ayub suggested that the proposed bill be deliberated in the Finance Committee.