FBR Issues Worthless Tax Recovery Notices to Salaried-Class

The Federal Board of Revenue (FBR) has unfairly issued show-cause notices to salaried individuals to meet revenue targets. The regulator is also demanding proof of tax deductions which employers typically provide on behalf of their employees. Experts said these notices lack legal standing and violate established tax laws. A valid tax return is considered a self-assessment, which cannot be disturbed unless an audit is conducted in case of a clear error. Legal experts also pointed out that under Section 161 of the Income Tax Ordinance, any short deduction or non-deduction of tax by an employer should result in proceedings against the employer and not the employee. This means that recovery orders can be issued against withholding agents before probing employees. However, FBR has started demanding tax payments directly from salaried individuals without first holding employers accountable. Another tax lawyer has called it a coercive tactic that undermines trust in the tax system and unfairly burdens salaried taxpayers. Experts warn that these indiscriminate recovery notices will hurt FBR’s credibility and create unnecessary distress for taxpayers. They urged the regulator to withdraw these notices and focus on enforcing employer compliance instead of punishing employees for lapses beyond their control.