ISLAMABAD: The Federal Board of Revenue (FBR) has introduced a digital solution designed to expedite the resolution of tax disputes and curb prolonged litigation through a technology-driven process. The initiative was formalised under a new provision in the Finance Bill 2026, which empowers the FBR to establish a digital system to generate settlement offers for registered taxpayers prior to the issuance of final assessment orders.
The mechanism is intended to facilitate early resolution of tax proceedings by giving taxpayers an opportunity to settle disputes through a transparent, automated framework rather than pursuing lengthy adjudication.
According to officials, the system-generated settlement offers will take into account several factors, including the stage of the proceedings, the taxpayer’s compliance history on record with the FBR, the nature of the identified discrepancy, and any other criteria the Board deems relevant.
Under the proposed framework, taxpayers who receive a settlement offer will have a ten-day window to accept it through the IRIS portal and deposit the specified settlement amount. Once payment is made, the issues raised in the relevant notice or audit report will stand abated, effectively closing those proceedings.
Commenting on the development, tax expert Arshad Shehzad said the mechanism has the potential to significantly reduce litigation, accelerate dispute resolution, and improve revenue collection by encouraging voluntary compliance.
He noted, however, that the framework could be further strengthened by introducing an additional layer of review, suggesting that a specialised committee be established to examine taxpayers’ responses and objections before assessments are finalised, to ensure greater fairness and equity in the process.
Shehzad described the initiative as part of broader efforts to modernise Pakistan’s tax administration through technology-driven reforms, reduce compliance costs for taxpayers, and enhance certainty in tax matters.
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