Tax experts accuse FBR of blocking sales tax filings to raise extra revenue

Tax experts have accused the Federal Board of Revenue (FBR) of using its online system to push registered businesses into “inactive” status, allegedly enabling the imposition of extra sales tax and increasing revenue collection.

According to Business Recorder, allegations have been raised by tax advisers who claim that some sales tax registrations are being declared inactive not because of deliberate non-compliance by taxpayers, but due to unresolved system-related issues and lack of timely administrative action by FBR officials.

Tax adviser Waheed Shahzad Butt, who is pursuing one such matter, alleged that taxpayers are being prevented from filing sales tax returns even after approaching the relevant authorities. He claimed that this practice is creating pressure on businesses to pay additional tax amounts, while also raising concerns about accountability and fair treatment within the revenue authority.

Return lock triggers inactive status

According to details shared by the tax advisor, a company had filed its December 2025 monthly sales tax return provisionally through the FBR’s online portal. However, the return was automatically locked after the system detected a negative figure in Annexure H-1. The issue was described as a technical anomaly linked to an incomplete annexure at the time of provisional filing.

The taxpayer argued that such a system-generated lock could only be resolved through intervention by authorised FBR officials. However, despite repeated requests, the return was allegedly not unlocked.

As a result, the company was unable to file subsequent sales tax returns from January 2026 onward. This delay then led the FBR system to automatically mark the company’s sales tax registration as “inactive”. Tax advisors say such a status can create serious legal and commercial difficulties for businesses operating in the formal economy, including disruptions in transactions and compliance records.

Waheed further said that a written application was submitted to the Secretary ST-Operations, followed by several visits to FBR headquarters. He claimed that officials were met in person on multiple occasions, but no corrective action was taken and no written response was issued.

The allegations have added to concerns among taxpayers over system transparency, administrative delays and the wider impact of unresolved portal-related issues on compliant businesses.