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July 03, 2026
Nine-Year FBR Tax Dispute with Overseas Pakistani Sparks Debate over Enforcement Powers
Karachi: A nine-year-old tax dispute between Pakistan’s Federal Board of Revenue (FBR) and an overseas Pakistani banker has snowballed into one of the country’s most talked-about conversations on the social media platform X, raising questions about the tax authority’s powers to pursue old tax claims and recover dues directly from bank accounts.
The controversy erupted after Arsalan Adam, a Pakistani banker based in Qatar, alleged in a letter to Prime Minister Shehbaz Sharif that FBR had transferred about Rs7 million ($25,162) from his bank account and was seeking to confiscate his property over an alleged tax liability dating back to 2017.
The case has drawn widespread attention among overseas Pakistanis, who contribute billions of dollars in annual remittances to Pakistan, amid concerns over the tax authority’s enforcement powers.
“On the 24th of June, my bank ... transferred all of my cash amounting to PKR7 million ($25,162) approximately to the FBR,” said Adam in a letter to Prime Minister Shehbaz Sharif on June 24.
“They now want to confiscate my property to make up the difference,” he said, calling the move a “daylight robbery.”
Adam left Pakistan in 2002 and has since held senior positions at multinational firms including Bank of America and Banque Saudi Fransi. He now serves as head of operations at Doha Bank in Qatar.
While Adam was not available to authenticate the document, the FBR verified it on its official X account by responding to what it described as “Mr Arsalan Adam’s tax grievance letter.”
FBR, in a rare move, said Adam had portrayed himself publicly as a non-resident expatriate but had declared himself a resident in his 2017 and 2018 tax returns, a status that carries full tax liability under Pakistani law.
It said Adam claimed tax exemption on Rs23.5 million ($84,472) in foreign income each year, far above the Rs5 million ($17,973) exemption limit, but failed to provide supporting evidence despite repeated notices.
“Resultantly, a lawful tax demand of Rs30 million ($107,836) was raised,” it said, accusing Adam of attempting to block the recovery process through fraudulent means.
“When FBR initiated lawful recovery, Mr Adam produced fake FBR orders before his bank, transmitted via WhatsApp to halt the process,” it claimed, sharing two such letters on X.
However, the dispute has also raised legal questions over whether FBR can pursue tax recovery nearly a decade after the original returns were filed.
Tax lawyer Nabeel Amjad said Sections 138 and 140 of the Income Tax Ordinance, 2001, empower FBR to recover unpaid taxes by attaching bank accounts, but argued the authority must first comply with statutory procedures and time limits.
“The FBR was not supposed to issue notices for all those years, but an order which would have legitimized its stance,” he told Arab News.
Amjad said Pakistan’s Supreme Court had ruled that taxpayers generally could not be questioned after six years.
“This recent order would be void and is against the income tax ordinance,” he continued, adding that time-barred cases could not be contested in courts.
FBR spokesperson Muhammad Yasir Pirzada, however, said that an order issued by the bureau even after five tax years is not void, adding that "the law allows it."
"These sections are never time-barred," Pirzada told Arab News about Sections 138 and 140 of the ordinance.
When asked to provide copies of the notices that FBR issued to Adam, Pirzada said they are a part of the taxpayer's record that could not be disclosed.
However, another FBR official, speaking on condition of anonymity, defended the action, saying Adam had been given multiple opportunities over the years to explain his tax position.
“It’s been nine long years that FBR has allowed him to clear his position, but he failed to do it,” he said.
The official said Adam had also filed an appeal.
“This is a progressive case, and Adam has gone into appeal so we will see how things unfold.”
Amjad said the amount claimed by FBR appeared to reflect taxes and penalties accumulated over several years after Adam’s 2017 return. However, he argued the underlying assessment itself was legally flawed because it related to tax years that, he said, had become time-barred.
“He was taxed not only on those two years but after that also,” Amjad said.
“If this case goes in litigation, FBR would definitely lose the case as they have taxed him wrongfully,” he opined. – Arab News
Courtesy Arab News
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