Pakistan’s tax landscape has seen a change with the introduction of the Tax Laws (Amendment) Act, 2024. This amendment impacts taxpayers seeking a stay order from the high court against disputed tax recovery.
What’s Changed?
Previously, taxpayers could challenge disputed tax amounts without any upfront deposit. Now, under the new law, a 30% deposit of the disputed tax determined by the Appellate Tribunal is mandatory to obtain a stay order from the high court. This applies to the Sales Tax Act, Income Tax Ordinance, and Federal Excise Act.
Process and Timeline:
- A taxpayer can file an application with the high court requesting a stay order on disputed tax recovery.
- The Commissioner will be given an opportunity to be heard on the matter.
- If the high court grants a stay order, a minimum 30% deposit of the disputed tax amount must be made to the assessing authority.
- The stay order remains valid for a maximum of six months from the date of issuance.
- The stay order either loses effect after six months, is withdrawn by the high court, or remains in place if the reference is decided within the timeframe.
Impact and Implications:
This amendment aims to streamline the process of tax disputes and potentially discourage frivolous challenges. By requiring a 30% deposit, the government hopes to encourage genuine cases while deterring those with weak claims.
Staying Informed:
Taxpayers and businesses in Pakistan are advised to be aware of this new regulation. It’s crucial to consult with a tax professional for guidance on navigating tax disputes and understanding the implications of the 30% deposit requirement for stay orders.
