FBR Gains Direct Tax Recovery Powers Under New Ordinance

President Asif Ali Zardari has enacted the ‘Tax Laws (Amendment) Ordinance, 2025.’ The ordinance grants sweeping powers to the Federal Board of Revenue (FBR).

It allows the FBR to recover outstanding taxes directly from bank accounts and seize movable or immovable assets. No fresh notices are required once a decision has been secured from a higher court.

The new ordinance effectively overrides the procedural requirement under section 138 of the Income Tax Ordinance 2001, allowing the FBR to bypass traditional notification processes. Following court verdicts in its favour, the tax authority can now proceed with recovery actions immediately.

Expanded Powers to Monitor Businesses

Among other significant provisions, the law also empowers the FBR to station tax officials at factories or business sites to monitor production output, inventory of unsold goods, and the overall supply chain. This marks a notable expansion of its operational reach.

Implementation began almost instantly. Late Saturday night, FBR initiated recovery efforts against businesses where judicial verdicts had upheld tax demands.

According to insiders, the first entity to comply under this new legal landscape was Telenor Pakistan (Private) Limited. The telecom giant, following an Islamabad High Court ruling, agreed to clear its multi-billion-rupee tax liability.

A second company, reportedly a joint venture in the telecom sector, also conceded and committed to paying the due amount in accordance with court directives.

Deodar’s Setback in Withholding Tax Case

Meanwhile, Deodar Pakistan manages Jazz’s telecom towers. The company lost a withholding tax dispute against the FBR in the Islamabad High Court.

In a related development, FBR and Jazz reached an out-of-court agreement involving Rs. 20 billion in taxes connected to the import of telecom infrastructure. Jazz chose not to escalate the matter legally, clearing the payment path.

However, complications persist.

Meanwhile in an official statement, the PMCL ( Jazz) has rejected the adverse court ruling claims saying ”

“It is clarified that neither PMCL nor its wholly owned subsidiary, Deodar, has received any adverse judgment in court, contrary to what was reported.

As one of the highest tax-paying businesses in the country, PMCL has consistently fulfilled its obligations in accordance with the law.

PMCL remains committed to compliance with applicable laws for all transactions, as and when required always within the framework of the law and without compromising the rights and guarantees available under the Constitution of Pakistan.”

The high-profile acquisition of Deodar Pakistan by Engro Corporation, a $563 million transaction previously approved by the Competition Commission of Pakistan, remains in limbo. The delay is due to outstanding legal hurdles.