Abdul Ghani

The Federal Board of Revenue (FBR) has announced that all pending disputes related to the state-owned enterprises (SOEs) will be transferred to a newly established committee for resolution under the provisions of the Income Tax (Third Amendment) Act, 2025, according to a document available with Wealth Pakistan. The amendment, which comes into effect with the commencement of the Act, mandates that all disputes currently pending with any court, appellate tribunal, or tax authority shall be transferred to the Board for resolution.

The newly appointed committee, as outlined under sub-section (3) of the Act, will take over these cases, offering a streamlined process for settlement and eliminating delays caused by multiple layers of legal proceedings. The committee will handle these disputes once the Income Tax (Third Amendment) Act, 2025 comes into force. The reform stipulates that the Board will appoint the committee within 15 days of receiving a dispute under sub-section (3) of the Act.

The new framework also includes provisions for the reconstitution of the committee in cases where disputes have not been resolved before the enactment of the Act. In such cases, the applicant, including the SOEs, may be required to submit a fresh application in accordance with the updated provisions of the Income Tax Act. Furthermore, the reform authorizes the Board to make new rules and regulations under this section, which will be notified in the official Gazette.

This power will enable the Board to enhance the transparency and effectiveness of the dispute resolution mechanism, ensuring a more structured and consistent approach to handling SOE-related disputes. The reform is expected to foster greater accountability and efficiency in the management of SOE-related disputes, contributing to a more robust and transparent system for resolving tax and legal issues in the public sector.

The Income Tax (Third Amendment) Act, 2025, and the new dispute resolution framework are seen as crucial steps toward improving the governance and operational efficiency of the SOEs, with potential long-term economic and fiscal benefits for Pakistan.

Credit: INP-WealthPk