FBR Granted Powers to Recover Taxes Without Prior Notice Under Tax Ordinance 2025, Sparking Legal Concerns

Islamabad – The Federal Board of Revenue (FBR) has been granted sweeping powers under the newly issued Tax Laws (Amendment) Ordinance 2025, allowing it to recover outstanding taxes directly from taxpayers’ bank accounts and seize movable and immovable assets without prior notice, triggering alarm among legal and tax experts.
According to Express News, these amendments enable FBR to bypass traditional legal procedures, raising serious concerns about transparency and the protection of taxpayers’ rights. Legal experts argue that the ordinance contradicts established judicial precedents and undermines due process.
The ordinance, issued by President Asif Ali Zardari, amends Section 138 of the Income Tax Ordinance 2001, giving FBR the authority to recover taxes without issuing notices once a court ruling has been made. Moreover, the FBR can now deploy officers inside business premises and factories to monitor production, delivery, and unsold stock.
Sources revealed that FBR initiated recovery actions immediately after the ordinance’s enforcement during the weekend, targeting major companies based on existing court decisions. A leading telecom company, following a ruling from the Islamabad High Court, has already agreed to pay billions in outstanding taxes. Another telecom joint venture is also reportedly complying under the ordinance.
Renowned tax lawyer Waheed Shahzad Butt criticized the amendments, calling them a direct violation of the Islamabad High Court’s verdict in the Pakistan LNG case, which emphasized legal transparency and due process. He warned that such unchecked powers could erode public trust in the tax system and equated them to “tax brutality” rather than fair collection.
Butt further highlighted that the court had previously mandated a seven-day notice under Section 138(1) before any enforcement action under Section 140. The new ordinance, however, overrides this legal safeguard, enabling immediate recovery irrespective of legal norms or pending appeals.
Legal experts have warned that the ordinance could open the floodgates to arbitrary enforcement, bypassing courts and forums, and effectively ignoring existing legal protections for individuals and businesses. They argue this represents a significant step backward in terms of legal transparency and judicial oversight.
The ordinance states that tax recovery must proceed immediately if a high court or Supreme Court decision exists in any matter—regardless of any other laws, rules, or court rulings to the contrary—posing a challenge to constitutional checks and balances.