FBR Halts Advance Tax Notices for Salary-Only Earners

The Federal Board of Revenue has moved to stop advance income tax notices from being issued to salaried individuals whose only declared source of income is their salary, in a decision aimed at reducing pressure on a segment already facing sustained tax deductions. The direction was issued by FBR Chairman Rashid Mahmood Langrial to tax officials, according to people familiar with the matter.

The instruction applies to salary-only taxpayers who had been receiving quarterly notices for advance income tax payments. Under the new direction, officials have been told not to send such notices to individuals who rely solely on employment income for their livelihood, easing a compliance burden that had become a recurring concern for many salaried workers across the country.

The relief is not expected to apply universally to every person who receives a salary. Individuals who earn additional income beyond their regular employment may still fall under rules requiring adjustable advance income tax payments. Those liabilities, where applicable, would be adjusted against the taxpayer’s final tax obligation under the relevant provisions.

The development comes at a time when Pakistan’s salaried class has repeatedly raised concerns over the level of taxation placed on fixed-income earners. The issue has gained wider attention as workers face high living costs, inflationary pressures and limited flexibility to offset deductions compared with businesses or groups with multiple income streams.

Former finance minister Asad Umar recently criticised the tax structure, saying salaried individuals had contributed more than Rs600 billion in taxes last year while landlords contributed less than Rs10 billion. He also linked weak growth, poverty and inflation to broader economic management concerns, arguing that tax policy had placed disproportionate pressure on people with documented incomes.

The FBR decision may offer immediate procedural relief to salary-only taxpayers, but it does not remove regular income tax deducted through payroll systems. Its main effect is expected to be on advance tax notices, which had required additional compliance and created uncertainty for people who were already paying tax through salary deductions.

Tax officials are now expected to implement the chairman’s direction across relevant offices, while taxpayers with income from property, business, investment or other sources may still be examined under normal tax rules. The move also signals that the debate over fairness in Pakistan’s tax system is likely to continue, especially as policymakers seek higher revenue while responding to public pressure over unequal tax burdens.