ISLAMABAD: Pakistan’s economy is facing a severe revenue crisis as Rs4.457 trillion in tax revenue remains stuck due to over 108,000 pending cases in courts, delaying much-needed funds for economic stability.
This alarming backlog was highlighted during a Supreme Court meeting chaired by Chief Justice Yahya Afridi on November 7, 2024, where Federal Board of Revenue (FBR) and Ministry of Finance officials detailed the growing litigation bottleneck.
Key Highlights:
- 6,000 tax cases are pending in the Supreme Court alone, blocking billions in recoveries.
- 2,000 additional cases are stuck in various courts and tribunals due to prolonged stay orders.
- Legal bottlenecks and unnecessary appeals by revenue authorities have worsened the crisis.
- Lack of dedicated revenue benches and an Alternative Dispute Resolution (ADR) mechanism has forced businesses and tax authorities into lengthy court battles.
Supreme Court’s Response:
To address these issues, the Supreme Court has formed a special committee to expedite tax litigation and propose solutions. The committee includes:
- Saleem Khan (Registrar, Supreme Court)
- Asim Zulfiqar & Sher Shah Khan (Governance and Public Sector Experts)
- Ishtiaq Ahmed Khan (DG Law, FBR)
- Imtiaz Ahmed Khan (Tax Expert & Committee Coordinator)
Proposed Reforms:
The committee has recommended several steps to speed up case resolution and improve tax collection efficiency:
- Dedicated Revenue Benches – Establish specialized benches in the Supreme Court and High Courts to focus exclusively on tax disputes.
- Binding ADR Mechanism – Introduce a mandatory Alternative Dispute Resolution (ADR) system within the FBR and provincial revenue departments to settle tax disputes outside the courts.
- Limit Revenue Authorities’ Appeals – Restrict tax officials from filing unnecessary appeals after two judicial rulings.
- Fast-Track Case Disposal – Implement strict timelines for resolving tax disputes.
- Centralized Case Law Database – Create a digital database to enable courts to quickly dispose of similar cases based on past legal precedents.
- Technology-Based Case Management – Streamline case processing by grouping cases with similar legal issues.
Economic Implications & Next Steps:
Pakistan’s economy is already struggling with fiscal deficits and low tax collection rates. Experts warn that if these cases remain unresolved, it could further strain the country’s financial health.
The Supreme Court’s intervention is seen as a critical step in ensuring tax justice and financial stability. The special committee is expected to present its final report soon, recommending concrete measures to clear the backlog and unlock billions in revenue for Pakistan’s struggling economy.
