Just a month before the presentation of the budget in parliament, President Asif Ali Zardari has promised an ordinance that provides extraordinary powers to taxmen to immediately recover taxes following statements of judgments from overall courts and to deputing officers on any assumption.

The powers have been obtained by the federal government through ad hoc legislation after the gaping tax shortage reached the RS830 billion in 10 months. The government could not wait for the presentation of the budget in the National Assembly, which is expected to be set in less than a month.

The tax shortage is expanded with the passage for each month despite imposing RS1.3 trillion in additional taxes, and Prime Minister Shehbaz Sharif’s promise to minimize the gap through recovery in the lawsuits.

The regulation has also empowered FBR to approve any employee of the federal or provincial government to seize and confiscate goods sold without requesting valid tax fixtures, barcodes, gangsoles, stickers, labels or barcodes.

President Zardari issued the regulation to amend the tax law, 2025, which took effect from May 2 (Friday), the document showed.

The government has deployed a new section of the Income Tax Regulation to immediately recover SKAT after notifications of judgments from the overall judiciary by relaxing the time limits.

The Newly Inserted A Sub-Section-3A-In Section 138 States That “Notwithstanding Anything Contained In This Ordinance or Any Other Law or Any Rule, Any Decision or Judgment of Any Court, Forum or Authority, The Tax Payable Under Any Provision of This Ordinance OR Assesment Order Shall BECOME IMMEDIATELY PAYABLE OR WITIN THE TIME SPECIFIED IN THE NOTICE ISSUED BY THE INCOME TAX AUTHORITY UNDER THIS SUBSECTION, IRRESPECTIVE OF THE TIME PROVIDED UNDER ANY OTHER PROVISION OR THE SAID Decision or Judment, In Case The Questions Giving Relation to the Paid Taxes, are decided by a Supreme Court or Supreme Court in Pakistan. “

Following the deployment, the tax will be immediately liable and the government can recover the taxes either directly from the party’s bank accounts or from third persons owning money to the party.

The change has limited taxpayers’ ability to postpone payment when the liability is maintained by overall courts, and there may be conflicting judgments from High Court, and in some cases all legal issues may not have been raised and judged, one of the legal experts said while explaining the amendment.

Lahore Chamber of Commerce and Industry made a statement on Saturday against the harsh powers given to FBR, who demanded the prime minister to turn the decision.

A similar change is made in section 140, where a new sub -section (6A) has been inserted. The changes would allow the taxpayers to go directly to the bank after receiving a decision from the court, the legal experts said.

For this financial year, the government had given RS12.97 trillion worth tax targets to FBR, and it is already facing RS830 billion in deficit, with two months back at the end of the financial year. Prime Minister Shehbaz Sharif had promised that at least RS400 billion would be recovered from the lawsuits to bridge the gap until June this year.

So far, the recovery of RS36 billion remained in the tax case. The government expected at least RS120 billion recovery in Super Income Tax Case and had hoped RS100 billion would fall in April. But it did not happen even if hope remains.

Intrusive forces assigned

Another change in the income tax regulation has been made and a new section has been added – 175c – in the law through ad hoc legislation. FBR has gained power that its “Chief Commissioner may send an officer in inner income or such officials with any appointment working under the control of the board or chief commissioner, to the premises of any person or class of such persons, to monitor the production, delivery of goods or reproduction of or provide services and storage of goods not sold at any time”.

The legal experts claimed that the main commissioner can now send officers within business premises to monitor production, shares or services for unsold goods-and these changes reflect a tighter enforcement regime and reduced space for litigation-based delay.

To set unrealistic goals in the last budget has come to haunt the government, as the costs have so far only been paid for by the grade and the business sector.

Bold Law Change

The government has also been given the powers to approve any official from the federal or provincial government to seize and confiscate goods that do not have a valid tracking identity.

According to a change in the federal excise law, the government has expanded the list of goods that can be seized and confiscated. Now any goods without imposing or attaching counterfeited tax fences, barcodes, gangeroles, stickers, labels or barcodes are confiscated by federal and provincial government employees.

According to a third amendment to the FED Act, FBR may, in the event of goods subject to surveillance and counterfeit goods, give any officer or employee of the federal or provincial government permission to exercise the powers and perform the functions of the Inner Revenue Officer to seize and confiscate counterfeit goods.