ISLAMABAD: The Federal Board of Revenue is collecting feedback from stakeholders to revise how members are appointed to the Alternative Dispute Resolution Committee.
Director General (Law) of FBR Dr Ishtiaq said the FBR will prepare a report after the consultation process. He said the aim is to make the committee more transparent and credible.
The move follows a directive from the Supreme Court. A two-member bench headed by Chief Justice of Pakistan Yahya Afridi, while hearing a petition from Zarai Taraqiati Bank Ltd on July 3, ordered the FBR to submit a report on the ADRC by July 24.
Dr Ishtiaq informed the court that the FBR is open to constructive suggestions under the law. The chief justice then permitted the FBR to engage with stakeholders.
Advocate Hafiz Ahsaan Ahmad Khokhar, a constitutional and tax law expert, said Pakistan needs a well-structured and effective Alternative Dispute Resolution system for tax cases. He said the existing litigation model has overloaded the judiciary and slowed the state’s ability to recover tax revenues on time.
He noted that thousands of tax cases involving hundreds of billions of rupees are stuck in appellate tribunals, High Courts, and the Supreme Court. He said this situation creates uncertainty for businesses, discourages investment, and delays revenue collection.
He added that a working ADR system is now necessary to reduce this backlog, build taxpayer confidence, and improve fiscal operations.
According to Khokhar, although Pakistan has legal provisions for ADR under Section 134A of the Income Tax Ordinance, 2001; Section 47A of the Sales Tax Act, 1990; Section 38 of the Federal Excise Act, 2005; and Section 195C of the Customs Act, 1969, the country has not implemented ADR effectively. He said key issues include lack of transparency in forming ADR Committees, the presence of serving tax officers on panels, shortage of qualified and neutral arbitrators, poor digital infrastructure, and the non-binding nature of ADR decisions, particularly in cases involving factual disputes.
