The Pakistan Tax Bar Association (PTBA) has urged the Federal Board of Revenue (FBR) to withdraw a new requirement that makes payment of an enhanced surcharge mandatory for inclusion in the Active Taxpayers List (ATL) for Tax Year 2025, arguing that the condition is not legally applicable for the said period.

In a letter to FBR Chairman Rashid Mahmood Langrial, the association said tax practitioners across the country have raised concerns over the implementation of the revised surcharge introduced through the Finance Act, 2026.

The PTBA noted that the FBR’s IRIS system is currently demanding payment of an enhanced default surcharge of Rs25,000 for individual taxpayers as a prerequisite for appearing on the ATL for Tax Year 2025. It argued that this requirement effectively imposes a new financial burden that cannot be enforced retrospectively.

According to the association, tax laws and judicial precedents clearly establish that new fiscal liabilities apply prospectively unless Parliament explicitly states otherwise. It maintained that applying the surcharge to a past tax year goes beyond the scope of the amended law.

The PTBA also referred to earlier legal interpretations of similar provisions, stating that courts have consistently ruled such amendments to be applicable only to subsequent tax years, not previous assessment periods.

The association has requested the FBR to instruct Pakistan Revenue Automation (Pvt) Ltd (PRAL) to remove the IRIS system condition that blocks ATL entry without payment of the enhanced surcharge for Tax Year 2025.

Alternatively, it suggested postponing the implementation of the requirement until Tax Year 2026, when the amended provision can be applied prospectively in line with established legal principles.