Thousands of Taxpayers Declared “Inactive” — Despite Pending Extension Requests
ISLAMABAD, November 2025 — The Federal Board of Revenue (FBR) is facing strong backlash after marking thousands of taxpayers as “inactive” on the very first day of November — even though many had officially applied for extensions before the October 31 deadline.
Taxpayers Left Frustrated
Tax experts say FBR’s move ignores proper legal procedure, as several extension applications are still pending and have not been reviewed. According to tax rules, a person’s active taxpayer status (ATL) cannot be suspended until their extension request has been formally rejected.
Although this was the requirement, many taxpayers around the nation woke up one morning to find themselves labeled “inactive”-a status that can cause serious financial problems, including higher tax deductions and loss of filer benefits.
Appeals to Outrage and Justice
The business community along with the salaried class criticized the FBR’s decision for being untimely and unjust. They argue that people who submitted extension requests on time are now being penalized for FBR’s delay in processing those applications.
Many affected taxpayers have urged the Member Inland Revenue (Operations) to immediately restore their active status until a final decision is made on their requests.
Manual Tax Return Form Delay
The fact that FBR has yet to upload the manual income tax return form for Tax Year 2025, despite the fact that the filing deadline has already passed, only serves to increase the frustration. Despite their willingness to file, many low-income and non-digital filers are now unable to comply.
Legal Experts React
Renowned tax lawyer Waheed Shahzad Butt has called on the Federal Tax Ombudsman (FTO) to take suo motu action against what he termed “administrative negligence and disregard for taxpayer rights.”
He noted that this situation highlights deep-rooted inefficiency within the FBR and the lack of accountability in its decision-making process.
Butt also reminded that the FTO had previously ordered the FBR to upload manual tax returns immediately for taxpayers earning less than Rs1 million, who are not required to e-file under Rule 73(2DD) of the Income Tax Rules, 2002. Despite this, the directive remains unimplemented.
The More Comprehensive View
This problem arises at a time when the FBR is already under pressure for failing to meet revenue goals and for implementing inadequate facilitation measures. Analysts said the latest dispute will continue to undermine public confidence, especially among law-abiding taxpayers.
Final thoughts
The FBR’s hurried decision to label taxpayers as inactive despite their pending extension applications demonstrates a troubling disconnect between digital enforcement and procedural justice.
Tax experts stress that if the tax authority wants to promote compliance, it must ensure fair, transparent, and timely decisions rather than raising questions for law-abiding taxpayers.