ISLAMABAD: The federal government has proposed a major overhaul of Pakistan’s tax litigation process through the Finance Bill 2026, introducing an independent review mechanism aimed at improving transparency and accountability in tax-related appeals.
Under the proposed framework, the Federal Board of Revenue (FBR) would be required to obtain approval from an Independent Case Scrutiny Committee before filing any tax appeal in the High Courts or the Supreme Court. The measure seeks to ensure that appeals are pursued only after an objective assessment of their legal merit.
The proposed committee will be responsible for examining disputes related to income tax, sales tax, and other federal taxes. It will also serve as a judicial oversight body, reviewing key tax cases before further legal action is taken.
According to the Finance Bill, the committee will be headed by a retired judge from the superior judiciary. Its membership will include an experienced tax lawyer with at least 15 years of professional practice, along with senior officials from the FBR, creating a mix of legal and administrative expertise.
The proposed system would require independent scrutiny of decisions issued by the Appellate Tribunal as well as judgments delivered by the High Courts. Recommendations made by the committee would be binding on the Commissioner Inland Revenue, ensuring greater consistency in the handling of tax disputes.
Officials believe the initiative could help reduce unnecessary litigation, strengthen confidence in the tax administration system, and promote fairer resolution of revenue-related cases. If approved, the Independent Case Scrutiny Committee is expected to begin operations immediately after its formal establishment.
