LHC Urges Tax Fee Equity for SMEs

Rawalpindi, September 5, 2025, 09:40 PM PKT — The Lahore High Court’s Rawalpindi Bench has issued a powerful call, urging the federal government to rectify a long-standing inequity in tax litigation, where small and medium taxpayers face a Rs50,000 per reference fee in high courts, while the Federal Board of Revenue (FBR) remains exempt, as reported by Business Recorder. In W.P. No. 2420 of 2024 (Mian Muhammad Akram versus Federation of Pakistan), Justice Jawad Hassan declared this financial barrier violates fundamental rights under Articles 4, 10-A, and 37(d) of the Constitution, denying equal access to justice and discouraging legitimate grievances from small and medium enterprises.

The court recommended legislative action to reduce or waive fees for taxpayers below certain income or turnover thresholds, or impose nominal fees on FBR to curb frivolous litigation, with Dr. Ishtiaq Ahmad Khan, FBR Director General Law, confirming an amendment review and submission of judicial observations to relevant forums. The LHC disposed of the writ petitions, directing its order as a guiding reference under Articles 199 and 201, urging Law and Justice and FBR ministries to amend the Income Tax Ordinance. The court also flagged flaws in the Appellate Tribunal Inland Revenue (ATIR), citing poor reasoning, procedural lapses, and misapplication of Sections 127–129, proposing training programs for Commissioners (Appeals) and ATIR members on legal reasoning, jurisprudence, and fair trial principles, plus independent ATIR appointment reviews for competence and transparency. Web context on tax justice shows past disparities, while posts found on X reflect relief mixed with skepticism—some hail equity, others question implementation. Critically, the narrative of “judicial reform” may mask enforcement hurdles—web data hints at systemic delays, and X sentiment suggests distrust in effective change, pointing to potential challenges.