Overseas Pakistanis face tax filing issues

RECORDER REPORT

ISLAMABAD: The overseas Pakistanis are facing serious difficulty in filing of Income Tax Returns for Tax Year 2026 due to non-availability of relevant form for Non-Resident Pakistanis.

Now, the IRIS system offers only a single generic return with a tab of “Resident/Non-Resident”.

According to the tax experts, the overseas Pakistanis willing to file their Income Tax Returns for Tax Year 2026 are facing acute difficulty, as the FBR has not devised or restored the specified/simplified Income Tax Return earlier available for Non-Resident Pakistanis on the IRIS portal.

Waheed Shahzad Butt, Chairman of the LTBA Public Interest Litigation Committee, has taken up the issue in a formal request/complaint addressed to the FBR Chairman and the Members Legal, Operations, Policy and IT, pointing out that till Tax Year 2025, IRIS carried a dedicated, purpose-built return for persons of Pakistani origin residing abroad, including non-residents with no Pakistan-source income who file voluntarily under Section 114(1) of the Income Tax Ordinance, 2001, to maintain Active Taxpayer List (ATL) status, obtain a filer certificate, or satisfy banking and remittance requirements.

For Tax Year 2026, that dedicated form has vanished. In its place, IRIS now offers only a single generic return with a “Resident/Non-Resident” tab and an option to answer “No” to the Wealth Statement requirement, a conflation that, the complaint states, has created serious and widespread confusion among overseas filers.

The complaint identifies four specific concerns: a statutory right rendered uncertain, since non-resident filers have no clear guidance on whether the generic form safely captures their status, real downstream risk, as incorrect filing could jeopardize ATL status and expose filers to higher withholding rates on banking transactions, property purchases and vehicle registration, a complete absence of any public notification, SRO, or IRIS help-text explaining the change and a disparate burden falling on overseas Pakistanis while other taxpayer categories retain functioning, purpose-specific forms.

The complaint urges the FBR Chairman to instruct the IT Wing to restore the dedicated Non-Resident return in its pre-2026 form, or, pending restoration, issue an official clarification on how non-resident Pakistan-origin persons with no Pakistan-source income should correctly complete the current combined form and its Wealth Statement option.

It further seeks a proportionate extension in the filing deadline for this category, so that no taxpayer is penalized for errors traceable to the system’s ambiguity rather than their own default. Swift FBR action is essential, given that overseas Pakistanis already file under practical constraints and any further delay risks deterring compliant taxpayers or exposing them to inadvertent errors during the ongoing filing season for Tax Year 2026, Waheed added.