Islamabad, March 2, 2025: Amid a projected Rs600 billion shortfall in tax revenue for the current fiscal year, it has been revealed that over Rs4 trillion remains stuck in more than 100,000 tax-related cases pending in courts across the country.
The issue was highlighted during a November 7, 2024, meeting chaired by Chief Justice of Pakistan (CJP) Yahya Afridi, where officials from the Federal Board of Revenue (FBR) and the Ministry of Finance disclosed that Rs4.457 trillion in tax revenue is tied up in unresolved cases in higher courts.
The revelation comes as Prime Minister Shehbaz Sharif’s government prepares for the first International Monetary Fund (IMF) review of its loan program, amid the Rs604 billion tax collection deficit.
The FBR has been tasked with collecting Rs9,168 billion by March 31, per its agreement with the IMF. However, it has so far collected Rs7,343 billion in the first eight months of the fiscal year, falling Rs604 billion short of its target.
With Ramadan, public holidays, and reduced working days in March leading up to Eid-ul-Fitr, the FBR faces an uphill battle in meeting its revenue targets.
Sources report that 6,000 tax cases are pending before the Supreme Court, involving billions in potential recoveries.
Additionally, around 2,000 cases are stuck in lower courts and tribunals due to prolonged stay orders while many cases have remained unresolved for years, obstructing tax collection efforts and causing significant financial losses.
To tackle this crisis, the Supreme Court has formed a special committee to investigate the backlog, identify obstacles, and propose solutions for speedier tax dispute resolution.
The committee consists of Saleem Khan (Supreme Court Registrar), Asim Zulfiqar (Governance and Public Sector Specialist), Sher Shah Khan (Finance Ministry Representative), Ishtiaq Ahmed Khan (FBR Director General – Law) and Imtiaz Ahmed Khan (Tax Expert & Committee Coordinator).
The committee has conducted consultations with key stakeholders, including FBR and Supreme Court Bar Association (SCBA), Punjab Tax Bar Association, Federation of Pakistan Chambers of Commerce & Industry (FPCCI) and business and industry representatives
Experts warn that continued delays in tax case resolutions could further strain Pakistan’s fragile economy. If left unresolved, the Rs4 trillion tax revenue could remain locked in legal limbo, worsening fiscal deficits and forcing the government to rely on more borrowing.
The Supreme Court’s intervention and proposed systemic legal reforms are seen as critical steps toward ensuring tax justice and financial stability in Pakistan.
The committee’s final report, detailing specific actions to expedite tax dispute resolutions, is expected soon.
