A Brief On Tax Laws (Amendment) Act 2024

KPMG Taseer Hadi & Co.
Chartered Accountants
A Brief on Tax Laws

(Amendment) Act,
2024
Date
08 May 2024
home.kpmg.pk
A Brief on Tax Laws (Amendment) Act, 2024
Preamble
The National Assembly approved the Tax Laws (Amendment) Act, 2024.
The Act mainly aims to revamp the appeals process for tax litigation in income, sales and federal excise
related cases in order to lead to a speedier closure of cases.
As per the FBR, this should help in settlement of cases in which billions of potential tax revenue is stuck
due to unnecessary and delayed litigation.
After the assent of the President of Pakistan on 01 May 2024, the Tax Laws (Amendment) Act, 2024 has
been enacted. The amendments made would be effective from 01 May 2024 unless otherwise provided.
This publication contains a review of changes made in the Income Tax Ordinance, 2001, Sales Tax Act,
1990 and Federal Excise Act, 2005 through the Tax Laws (Amendment) Act, 2024.
This document contains the comments, which represent our interpretation of the legislation. We
recommend that while considering their application to any particular case reference be made to the
specific wordings of the relevant statute.
This publication is also available on our website.
8 May 2024
© 2024 KPMG Taseer Hadi & Co., a Partnership firm registered in Pakistan and a member firm of the KPMG global organization of independent member firms affiliated with KPMG
International Limited, a private English company limited by guarantee. All rights reserved.
A Brief on Tax Laws (Amendment) Act, 2024
Contents
Executive Summary 1
Income Tax Ordinance, 2001 2
Sales Tax Act, 1990 6
Federal Excise Act, 2005 7
Points to Ponder 8
A Brief on Tax Laws (Amendment) Act, 2024 1
Executive Summary
The Tax Laws (Amendment) Act, 2024 [the Act] has introduced significant changes to the way tax
appeals will be handled in Pakistan. This applies to the Income Tax Ordinance, 2001, the Sales Tax
Act, 1990 and the Federal Excise Act, 2005.
The key changes include:
1. The Act introduces pecuniary jurisdiction system, prescribing applicable appellate forum based on
the monetary threshold of the appeals.
2. The power to appoint the Chairman and members of the Appellate Tribunal Inland Revenue
(ATIR) has now been vested with the Federal Government in place of the Prime Minister.
3. The Act mandates swift resolution of appeals by the ATIR and emphasizes the utilization of
Alternative Dispute Resolution (ADR) mechanisms before formal proceedings commence.
4. Composition of ATIR revamped for Income Tax, Sales Tax and Federal Excise Act, by removing
distinction between judicial and accountant members.
5. The Act seeks to formulate procedures of the High Courts relating to disposal of tax cases.
6. Peculiar litigation process for State Owned Enterprises (SOE) has been introduced as the
removed the threshold for mandatory ADR referral of income tax disputes involving such SOEs.
7. Establishment of a Directorate General of Law under the auspices of both the Sales Tax Act, 1990
and the Federal Excise Act, 2005.
Income Tax Ordinance, 2001

Pecuniary Jurisdiction in Appeals appointed as members shall cease to hold
office on attaining the age of
Before the enactment of these changes, the superannuation, under the law regulating
first appellate forum available to taxpayers their service.
was Commissioner Appeals irrespective of the
amount of tax demand involved. Changes to ■ A member including the Chairman can be
pecuniary jurisdiction have been made to removed by the Federal Government upon
process of appeals through insertion of a new the recommendations of a performance
review carried out before expiry of the
section, i.e. section 126A to the Income Tax
term or attaining the age of
Ordinance, 2001 [the Ordinance], whereby
superannuation, as the case may be, on
appeals involving assessment or refund value
grounds, inter-alia, of inefficiency or
not exceeding Rs. 20 million can be contested
misconduct as prescribed by the rules.
before Commissioner Appeals and, all appeals
involving assessment or refund value ■ Prior to the amendments, there were two
exceeding Rs. 20 million shall now directly be (2) categories of members i.e. Judicial
submitted before the Appellate Tribunal Inland member and Accountant member with
Revenue (ATIR). The summary is as follows: different qualifications. Now such
distinction has been removed and there is
Assessment one category only, that is, of a ‘Member’.
Appeal Forum or Refund Criteria of the appointment of Members of
value the Appellate Tribunal has been amended
Not exceeding which is as follows:
Commissioner (Appeals)
Rs. 20 million
(a) Is an advocate of a High Court for not
Appellate Tribunal Inland More than Rs. less than 15 years and possesses
Revenue (ATIR) 20 million such other qualifications as may be
prescribed by rules;
Both the decision of Commissioner Appeals or
(b) Has for a period of not less than 10
ATIR will be challengeable at the High Courts.
years practiced professionally as a
Chartered Accountant within the
All pending cases whose value of assessment
meaning of the Chartered Accountants
or refund exceeds Rs. 20 million shall deemed
Ordinance, 1961;
to be transferred to the ATIR on 16 June 2024.
(c) Has for a period of not less than 10
Appellate Tribunal Revamped years practiced professionally as a
Through the Act, section 130 of the Ordinance cost and management accountant
has been substituted and significant changes within the meaning of the Cost and
have been made to the body structure of the Management Accountants Act, 1966;
Appellate Tribunal Inland Revenue (ATIR) (d) Is an Officer of the Inland Revenue in
detailed below: BS-21 or above; or
■ Federal Government has now been (e) Is an Officer of the Inland Revenue in
empowered instead of the Prime Minister BS-20, having served in such grade
to appoint the Chairman and the members for 3 years or more.
of the Appellate Tribunal, who will hold the
office for a period of three (3) years.
■ Members including the Chairman shall

cease to hold office on attaining the age of
62 years and Officers in BS-21 or BS-20
The comparison of new versus existing criteria is provided below:
Current provisions Tax Laws (Amendment) Act, 2024
Judicial Member Member
(a) Has been a Judge of a High Court; (a) Is an advocate of a High Court for not
less than 15 years and possesses
(b) Is or has been a District Judge; or such other qualifications as may be
prescribed by rules;
(c) Is an advocate of a High Court with a standing of
not less than 10 years; or (b) Has for a period of not less than 10
years practiced professionally as a
(d) Possesses such other qualification as may be Chartered Accountant within the
prescribed under sub-section (2) of this section. meaning of the Chartered
Accountants Ordinance, 1961;
Accountant member
(c) Has for a period of not less than 10
(a) Is an officer of the Inland Revenue Service years practiced professionally as a
equivalent in rank to that of [Chief Commissioner cost and management accountant
Inland Revenue]; within the meaning of the Cost and
Management Accountants Act, 1966;
(b) Is a Commissioner Inland Revenue or
Commissioner Inland Revenue (Appeals) having (d) Is an Officer of the Inland Revenue in
not less than three years’ experience as BS-21 or above; or
Commissioner;
(e) Is an Officer of the Inland Revenue in
(c) Has for a period of not less than ten years practiced BS-20, having served in such grade
professionally as a chartered accountant within the for 3 years or more.
meaning of the Chartered Accountants’ Ordinance,
1961 (X of 1961); or
(d) Has for a period of not less than ten years practiced
professionally as a cost and management
accountant within the meaning of the Cost and
Management Accountant’ Act, 1966 (XIV of 1966).
Turn to Next page
Appeal to Appellate Tribunal Decision of appeals by the

Appellate Tribunal
The provisions of section 131 of the Ordinance
related to process of appeal before ATIR have The process for decisions by ATIR has been
been substituted. Prominent changes in the revamped through substitution of section 132
law are summarized below: of the Ordinance. The significant changes are
elaborated below:
■ The Appeal before ATIR shall now be
made within 30 days of an order passed ■ ATIR must decide appeals within 90 days
by an Officer of Inland Revenue or of filing, except for those pending on the
Commissioner or Chief Commissioner or enactment of the Tax Laws (Amendment)
the Board or Commissioner (Appeals)
Act, 2024, which must be decided within
under the Ordinance except for SOE.
180 days. If not decided within these
periods, condonation from the Minister of
■ SOE can file an appeal to ATIR where
Alternate Dispute Resolution Committee Law and Justice is required, not extending
fails to decide the case within stipulated beyond 90 days.
period of 60 days.
■ At the first hearing, ATIR must inform the
■ The main changes are tabulated as below: taxpayer about alternative dispute
resolution options and, if declined, set
Tax Laws
hearing dates in consultation with both
Current taxpayer and Commissioner.
Description (Amendment)
provisions
Act, 2024
■ Strict adherence to the hearing schedule is
Who can file Any person Any person, required, with adjournments granted only
appeal except State for compelling reasons, recorded by the
Owned Tribunal; and upon payment of a minimum
Enterprise cost of Rs. 50,000.
(SOE)
■ Regarding assessment orders, ATIR can
Period to Within 60 Within 30 days affirm, modify, or annul them, remand
file appeal days cases to the Commissioner, or make other
appropriate orders.
Appeal ■ Company ■ Company
Filing fee Rs. Rs. 20,000, ■ Increases in assessment or penalties, or
5,000, decreases in refunds, are only permitted
■ Other than
■ Other company after the taxpayer has had a reasonable
than Rs. 5,000 opportunity to respond.
company
Rs. 2,000 ■ If changes are made to an association of
persons' assessment, ATIR may authorize
Maximum Up to 180 90 days corresponding amendments to individual
Period of days members' assessments without time
stay limitations.
■ The stay against recovery shall have effect ■ For decisions unrelated to assessments,
till the finalization of the appeal subject to the ATIR can affirm, vary, or annul them
decision by the ATIR within the statutory and issue necessary directions.
period and the condition that the taxpayer
adheres to the hearing schedule for the ■ ATIR's decision on appeals, except as
appeal, otherwise the stay will provided in section 133, will be final.
automatically cease to have effect.
Changes in Reference Filing Before not apply and it will be mandatory for such
High Court SOE to apply to the Board for the Appointment
of a Committee for the resolution of any
Certain changes have been made to the dispute.
process of reference filing before High Courts
by substituting section 133 of the Ordinance Application for dispute resolution shall be
as summarized below: accompanied by an initial proposition for
resolution of the dispute, including an offer of
■ The aggrieved person, or the tax payment and an undertaking that applicant
Commissioner can file a reference to the shall accept the decision of the Committee
High Court against Appellate Order of which shall be binding on them in all respects
Commissioner (Appeals) or Appellate and shall on receipt of the decision
Tribunal, as the case may be, within 30 immediately withdraw any and all pending
days of receipt of order, stating any litigation or cases of any kind in respect of the
question of law or mixed question of law dispute, mentioning details thereof.
and facts arising out of such orders.
Further the applicant is required to submit If SOE is the applicant than the SOE may file
complete record of the Appellate Tribunal an appeal to the ATIR or the High Court or the
to the High Court within 15 days of the Supreme Court as the case may be, where
submission of application. applicable.
■ The High Court shall establish a case On receipt of the order of dissolution, the court
management system to ensure that of law or the Appellate Tribunal shall decide the
sufficient number of special benches are appeal within 90 days of the communication of
constituted, to ensure that references filed the said order.
are decided within six (6) months from the
date of its filing.
■ The Commissioner shall not make

recovery of tax for 30 days from the date
of receipt of Appellate Tribunals orders.
■ Grant of stay by High Court is conditional

upon deposit of at least 30% of the tax
determined by the Appellate Tribunal.
■ Application fee has been increased from

Rs. 100 to Rs. 50,000.
■ Applications filed by a Commissioner will

not be entertained unless it is
accompanied by a written authorization by
the relevant Chief Commissioner.
Alternative Dispute Resolution

(ADRC)
Through changes in Section 134A of the
Ordinance, the limit for the tax disputes that
can be referred to ADRC for resolution has
been reduced from Rs. 100 million or above to
Rs. 50 million or above.
But if the aggrieved person is a SOE, the limit

of tax liability of Rs. 50 million or above shall
Sales Tax Act, 1990

Pecuniary Jurisdiction in Appeals Directorate General of Law
Pecuniary Jurisdiction have been added to the The Act has inserted new section 30DDDA to
process of appeals in Sales Tax Act, 1990 the 1990 Act to establish Directorate General
[1990 Act] as follows: of Law and relevant positions under this
Directorate as Law officers.
Assessment
Appeal Forum or Refund
value
Not exceeding
Rs. 10 million
Appellate Tribunal Inland More than Rs.
Revenue (ATIR) 10 million

or refund exceeds Rs. 10 million shall on and
from 16 June 2024 stand transferred to the
ATIR.
Appeal to Appellate Tribunal

The Act has substituted the provisions of
section 46 of the 1990 Act relating to ATIR in
line with similar amendments made in
provisions for the ATIR in the Ordinance.
Reference to Hight Court

section 47 of the 1990 Act relating to reference
to High Court in line with similar amendments
made in provisions for the High Court in the
Ordinance.
Alternate Dispute Resolution

[ADRC]
section 47A of the 1990 Act relating to ADRC
in line with similar amendments made in
provisions for the ADRC the Ordinance.
Federal Excise Act, 2005

Pecuniary Jurisdiction in Appeals Directorate General of Law
Pecuniary Jurisdiction are added to the The Act has inserted clause (e) in Section 29
process of appeals in Federal Excise Act, of the 2005 Act to include Directorate General
2005 [2005 Act] as follows: of Law and the relevant positions under this
Directorate as Federal Excise Law Officers.
Assessment or
Appeal Forum
Refund value
Not exceeding
Rs. 5 million
Appellate Tribunal Inland More than Rs. 5
Revenue (ATIR) million

or refund exceeds Rs.5 million shall on and
from 16 June 2024 stand transferred to the
ATIR.
Appeal to Appellate Tribunal

section 34 of the 2005 Act relating to ATIR in
provisions for the Appellate Tribunal in the
Ordinance.
Reference to Hight Court

section 34A of the 2005 Act relating to
reference to High Court in line with similar
amendments made in provisions for the High
Court in the Ordinance.
Alternate Dispute Resolution

[ADRC]
section 38 of the 2005 Act relating to ADRC in
provisions for ADRC in the Ordinance.
Points to Ponder
We understand that this Act needs to undergo seeking adjournment from the High Court
a sanity check for confirmation with judicial, albeit cogent reasons appear against the
constitutional norms and other aspects spirit of natural justice.
particularly on following points:
■ The monetary threshold for Commissioner
■ The Federal Government has been given Appeals jurisdiction appears low
the power to remove the Chairman considering the consistent double-digit
Appellate Tribunal. This may be seen as inflation in recent years. This forum may
effecting the independence of the judiciary practically become non-existent for
considering that Federal Government itself taxpayers in Large Taxpayers Office.
is a party to the taxation litigations.
■ The law has prescribed timelines for

disposal of cases by the Courts. The
settled position is that timelines prescribed
for courts can only be declaratory and not
mandatory.
■ The law has prescribed the practices and

procedures of the High Courts which
appears an action outside the scope of the
revenue law or encroaching into judicial
affairs.
■ Removal of distinction between

Accountant and Judicial members may
lead to constitution of benches with both
the members from Inland Revenue. This
can affect Tribunal’s fabric as the first
independent forum outside revenue
department.
■ Under the amended position, the judges of

the High Court and the District Courts who
bring invaluable experience of civil
jurisprudence will not be appointed as
member of the Tribunal.
■ The distinctive agitation process for SOE

appears in conflict with position at section
49 of Income Tax Ordinance, 2001
whereby corporations are already spelled
as distinct from Federal Government.
■ The law intends to provide that the order

of Commissioner Appeals is directly
appealable at High Court. Hence
reference to High Court will be sans an
independent judicial forum scrutiny.
■ Prescribing minimum payment of tax for
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The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or
entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate
as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without
appropriate professional advice after a thorough examination of the particular situation.
© 2024 KPMG Taseer Hadi & Co., a Partnership firm registered in Pakistan and a member firm of the KPMG global organization of
independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights
reserved.
The KPMG name and logo are registered trademarks or trademarks of KPMG International.

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KPMG Taseer Hadi & Co.

A Brief on Tax Laws

This publication is also available on our website.

Income Tax Ordinance, 2001 2

Sales Tax Act, 1990 6

Federal Excise Act, 2005 7

The key changes include:

Income Tax Ordinance, 2001

■ Members including the Chairman shall

The comparison of new versus existing criteria is provided below:

Current provisions Tax Laws (Amendment) Act, 2024

Judicial Member Member

Turn to Next page

Appeal to Appellate Tribunal Decision of appeals by the

■ The Commissioner shall not make

■ Grant of stay by High Court is conditional

■ Application fee has been increased from

■ Applications filed by a Commissioner will

Alternative Dispute Resolution

But if the aggrieved person is a SOE, the limit

Sales Tax Act, 1990

All pending cases whose value of assessment

Appeal to Appellate Tribunal

Reference to Hight Court

Alternate Dispute Resolution

Federal Excise Act, 2005

All pending cases whose value of assessment

Appeal to Appellate Tribunal

Reference to Hight Court

Alternate Dispute Resolution

■ The law has prescribed timelines for

■ The law has prescribed the practices and

■ Removal of distinction between

■ Under the amended position, the judges of

■ The distinctive agitation process for SOE

■ The law intends to provide that the order

■ Prescribing minimum payment of tax for

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