KARACHI: The Karachi Tax Bar Association (KTBA) has requested the Federal Board of Revenue (FBR) to immediately rectify a critical technical flaw in the IRIS portal that continues to unlawfully impose surcharges on members of Association of Persons (AOP), despite clear legal exemptions.
In a letter addressed to the FBR, the KTBA emphasized that the issue, first raised in August and September 2025, remains unresolved, causing significant hardship to taxpayers and tax practitioners across the country.
According to Section 92 of the Income Tax Ordinance, 2001, income received by AOP members as their share is explicitly exempt from taxation. This means that even when a member’s share income exceeds PKR 10 million, the surcharge under Section 4AB should not apply to such income.
However, the KTBA pointed out that the IRIS portal’s tax computation system continues to incorrectly apply the surcharge on AOP members’ share income exceeding the PKR 10 million threshold, directly contradicting the statutory exemption.
“This treatment is inconsistent with the explicit exemption provided under Section 92 and results in unlawful tax demand generation,” the association stated in its letter, describing the situation as causing “unwarranted hardship to taxpayers and professional practitioners.”
This marks the third communication from the KTBA on the matter, following earlier letters dated August 28 and September 23, 2025. The persistence of the technical error despite multiple notifications has raised concerns about the portal’s accuracy and the responsiveness of the FBR’s technical team. The tax bar declared the issue as a “glaring inconsistency in the tax computation logic and system design” that undermines taxpayer confidence in the digital tax filing system.
The KTBA has urged the FBR to immediately direct its IRIS technical team to correct the system’s programming to align with legal provisions governing AOP member share income taxation.
“This correction is critical to avoid repeated errors in surcharge application and to restore taxpayer confidence in the portal’s accuracy and fairness,” the letter said.
Copyright Business Recorder, 2025
