The Federal Board of Revenue (FBR) in Pakistan has introduced a new electronic income tax return form for individuals, set to be implemented for the tax year 2025. Titled the “Simplified Electronic Return for Individuals,” the form has sparked widespread discussion due to its extensive 25-page length, raising questions about its complexity and accessibility. Announced on July 8, 2025, through notifications S.R.O. 1212(I)/2025 and S.R.O. 1213(I)/2025, this reform is part of the FBR’s ongoing efforts to modernize Pakistan’s tax system. This article explores the details of the new form, its implications for taxpayers, and the broader context of tax reforms in Pakistan.
Background of the Reform
The FBR, Pakistan’s central revenue authority, is tasked with collecting taxes and ensuring compliance under the Income Tax Ordinance, 2001. In recent years, the government has pushed for digital transformation to streamline tax processes, enhance transparency, and boost revenue collection in a country where only a small fraction of the population—approximately 5.2 million out of over 240 million—filed income tax returns in 2022. The introduction of the new electronic form, integrated into the FBR’s IRIS 2.0 portal, aims to simplify tax filing for salaried individuals, small business owners, and professionals while capturing comprehensive financial data.
The new form replaces the previous 800-column version, condensing it into seven key categories, including income, pensions, property rent, bank account profits, and dividends. Despite its “simplified” label, the 25-page document has drawn criticism for its length and perceived complexity, prompting debates about its practicality for the average taxpayer.
Key Features of the New Form
The “Simplified Electronic Return for Individuals” is designed to capture detailed financial information across various income sources. Each page of the form is dedicated to specific headings, such as “Your Income,” “Your Pension,” “Your Rent from Property,” “Your Profit on Bank Accounts,” and “Your Dividends.” This structured approach aims to ensure accuracy and completeness in reporting, reducing errors and tax evasion. The form is part of the IRIS 2.0 e-filing system, which allows taxpayers to log in, select the appropriate tax year, enter their details, upload supporting documents, and submit their returns using a unique four-digit PIN.
In addition to the individual form, the FBR issued a draft income tax return form for companies under S.R.O. 1212(I)/2025. Proposed amendments to the Income Tax Rules, 2002, were also announced under S.R.O. 1213(I)/2025, reflecting the FBR’s authority under Section 237 of the Income Tax Ordinance, 2001. These changes aim to align tax processes with modern standards, emphasizing digital submission and transparency.
The FBR has opened a seven-day public consultation window, starting from the publication of the draft in the official Gazette on July 8, 2025. Taxpayers and stakeholders can submit objections or suggestions via the FBR website, with the board committing to review feedback before finalizing the forms. This participatory approach underscores the FBR’s intent to address concerns and refine the system based on public input.
Implications for Taxpayers
The introduction of the 25-page form has elicited mixed reactions. On one hand, the shift to a fully electronic system aligns with global trends toward digitization, potentially reducing paperwork and improving efficiency. The IRIS 2.0 portal offers features like profile updates, tax payment tracking, and wealth statement filing, making it a comprehensive platform for tax-related tasks. For salaried individuals earning up to PKR 600,000 annually, the form maintains tax exemptions, while those in higher income brackets benefit from revised tax slabs introduced in the Finance Act 2025, such as a reduced rate from 5% to 1% for incomes between PKR 600,001 and 1,200,000.
However, the form’s length has raised concerns about accessibility, particularly for individuals with limited tax literacy or access to digital tools. Critics argue that a 25-page document, even if electronic, may overwhelm salaried individuals and small business owners who lack the resources to hire tax professionals. Social media posts on platforms like X have highlighted the irony of the “simplified” label, with users questioning the FBR’s definition of simplicity and calling for a more concise form.
The deadline for filing income tax returns and wealth statements for the tax year 2025 is September 30, 2025. The FBR has emphasized the importance of timely submission to avoid penalties, offering video tutorials and a knowledge base on their website to guide taxpayers through the process. Tools like the TaxationPk salary tax calculator also aim to simplify calculations, but the complexity of the form remains a hurdle for many.
Broader Context of Tax Reforms
Pakistan’s tax system faces significant challenges, including a low tax-to-GDP ratio and a largely undocumented economy. The government’s push for reforms, as outlined in the Finance Act 2025, seeks to address these issues by promoting fairness and compliance. The new tax slabs, announced by Federal Finance Minister Muhammad Aurangzeb during the fiscal budget speech on June 10, 2025, offer relief to middle-income earners while increasing contributions from higher earners. For example, the tax rate for incomes between PKR 2.2 million and 3.2 million has been reduced from 25% to 23%, reflecting a progressive taxation approach.
The FBR’s efforts to digitize tax filing, including the IRIS 2.0 portal and the new electronic form, are part of a broader strategy to align with International Monetary Fund (IMF) recommendations for increasing domestic revenue. However, measures like blocking 210,000 SIM cards of non-filers in 2024 have sparked controversy, with critics arguing that such punitive actions disproportionately affect low-income individuals who may not be required to file taxes.
Challenges and Opportunities
While the new form aims to enhance compliance, its complexity could deter taxpayers, particularly in a country with low digital literacy and internet access in rural areas. The FBR must balance the need for detailed data collection with user-friendliness to ensure widespread adoption. The seven-day feedback window provides an opportunity for stakeholders to advocate for simplifications, such as reducing the form’s length or improving its interface on the IRIS portal.
On the positive side, the electronic form strengthens Pakistan’s tax infrastructure, potentially increasing revenue and reducing reliance on external loans. The FBR’s commitment to reviewing public feedback suggests a willingness to adapt, which could lead to a more refined final version of the form. Tax professionals and online tools will play a crucial role in helping taxpayers navigate the new system, particularly during the initial transition period.
Conclusion
The FBR’s introduction of a 25-page electronic income tax return form for individuals marks a significant step in Pakistan’s tax modernization journey. While the form’s comprehensive nature aims to improve accuracy and transparency, its complexity has sparked concerns about accessibility and practicality. As the FBR gathers feedback and finalizes the form, addressing these concerns will be critical to ensuring its success. For taxpayers, leveraging resources like the IRIS portal, FBR tutorials, and tax calculators will be essential to meet the September 30, 2025, deadline. As Pakistan strives to strengthen its tax system, the new form represents both a challenge and an opportunity to foster a culture of compliance and fairness.
Sources: Federal Board of Revenue (fbr.gov.pk), Profit by Pakistan Today, Business Recorder, TechJuice, Pakistan Observer
