The Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to recover Super Tax from taxpayers only after adjusting any pending refund claims.
In an order issued on Wednesday, the ombudsman stated that forcing taxpayers to pay Super Tax in cash while their refunds are still pending is unfair. The FTO said that such practices amount to coercion and harassment of taxpayers.
The directive instructs the FBR to issue clear guidance to all Inland Revenue field formations to ensure that Super Tax recovery is carried out only after refund claims are properly adjusted.
The FTO also directed the Commissioner Inland Revenue of the Refund Zone at the Regional Tax Office in Faisalabad to decide the complainant’s refund application for the tax year 2024 according to the law.
The office must provide the taxpayer an opportunity to be heard and submit a compliance report within 45 days.
The complaint was filed under Section 10(1) of the Federal Tax Ombudsman Ordinance, 2000 regarding the non-issuance of an income tax refund of Rs4.506 million for the tax year 2024.
According to the complaint, the taxpayer filed the income tax return under Section 114(1) of the Income Tax Ordinance, 2001 and submitted an electronic refund application on August 13, 2025.
The taxpayer also sent reminders on December 17, 2025 and January 6, 2026, but the refund was not processed within the required time under Section 170(4) of the Income Tax Ordinance.
During the proceedings, it was revealed that the department had issued a Super Tax demand of Rs1.548 million for the same tax year.
The ombudsman concluded that the taxpayer’s request to adjust the refund against the tax demand was reasonable and that insisting on cash recovery despite a pending refund claim was unjustified.