The Federal Tax Ombudsman has directed the Federal Board of Revenue (FBR) to Operationalize 25% tax concession for women entrepreneurs in the income tax return (IRIS) system within 30 days, terming the delay a clear case of maladministration.
The order came after a complaint filed by Advocate High Court Nida Khan, who argued that the FBR had failed to implement Clause 19 (Part III) of the Second Schedule to the Income Tax Ordinance 2001. The clause, introduced through the Finance Act 2021, provides that newly established businesses owned by women — set up on or after 1 July 2021 — are entitled to a 25% reduction in payable tax on their business income.
Khan stated that despite the legal provision, the FBR did not integrate the concession into the IRIS income tax return system for four consecutive tax years — 2022, 2023, 2024 and 2025. As a result, eligible women entrepreneurs were unable to avail the benefit and were deprived of their statutory right for four years.
The federal tax ombudsman, after reviewing the complaint, held that the FBR’s inaction amounted to maladministration. The ombudsman instructed the FBR to make the 25% tax relief facility fully functional in the IRIS system within 30 days and to submit a compliance report after implementation.
During the proceedings, FBR representatives acknowledged that Clause 19 was legally enforceable. They informed the ombudsman that instructions had already been issued to the Director General (IT and Digital Transformation) to introduce the necessary changes in the IRIS system so that the facility could be activated for women taxpayers.
The ombudsman’s decision not only directs immediate compliance but also underscores the gap between legislation and enforcement within Pakistan’s tax system. The ruling aims to ensure that women entrepreneurs — recognised by law for their contribution to economic growth — finally receive the fiscal relief guaranteed to them under the Finance Act 2021.
The case highlights how technical delays and administrative negligence can undermine policy reforms meant to promote gender equity in business. The federal tax ombudsman’s intervention seeks to restore fairness and uphold women’s right to equal treatment within Pakistan’s taxation framework.
