• Decision taken on PM’s directive after committee’s recommendation
• FBR analysis points to widespread reluctance in voluntary asset valuation

ISLAMABAD: In a dramatic U-turn, the government on Friday scrapped the asset valuation column from the tax return form for 2025 — just a day after issuing a strongly worded clarification — bowing to mounting pressure from various stakeholders.

The lightning-fast reversal, prompted by criticism from tax practitioners, lawyers and other groups, has reignited debate over policy consistency and digital reforms aimed at documenting the cash economy.

The income tax return form for 2025, released on July 7, had required taxpayers to declare the market value of their assets, as outlined on page 66 of the form. Since then, taxpayers had been submitting returns with the flexibility to either declare the estimated market value of their assets or enter zero in the designated column.

This practice continued even as nearly 2.7 million taxpayers filed their returns under the same arrangement. However, internal analysis by the Federal Board of Revenue (FBR) revealed a widespread reluctance to voluntarily declare market values.

In response, the FBR introduced a technical adjustment to the system, eliminating the option to enter zero and effectively making it mandatory for all filers to disclose a fair estimate of their asset values. This move triggered strong resistance from multiple quarters, highlighting persistent reluctance to support the formal documentation of the country’s largely cash-driven economy.

On Thursday, the FBR issued a strongly worded clarification, urging taxpayers to declare the market value of their assets in good faith. It assured filers that such disclosures would not be used as grounds for additional taxation and that no supplementary documentation would be required for verification, nor would tax notices be issued solely on the basis of declared asset values.

Despite these assurances, the controversy persisted. In response, Prime Minister Shehbaz Sharif formed a high-powered committee led by Law Minister Azam Nazeer Tarar to examine the new column in the IRIS tax return system that required the declaration of estimated fair market value of movable and immovable assets.

The committee was tas­ked with evaluating the implications of the provision for taxpayers and recommending corrective measures to ensure clarity, fairness and administrative feasibility.

On Friday, the committee held consultations with top tax officers to assess the legal aspect of the column.

“The requirement to declare the true market value of assets is firmly embedded in the income tax law,” a senior tax official said, adding that many taxpayers were reluctant to disclose the actual value of their assets, reflecting broader resistance to financial transparency.

Following deliberations, the committee decided to remove the estimated market value column from the 2025 income tax return form on the directives of the prime minister, an FBR announcement said.

The committee included the federal minister for petroleum, the minister of state for finance, the attorney general for Pakistan, the special assistant to the prime minister on coordination, the finance secretary, the FBR chairman and its member customs.

After detailed discussions in its meeting on Friday, the committee recommended that the new column requiring taxpayers to declare estimated fair market values of their assets be withdrawn in the interest of simplifying the filing process.

The recommendation was submitted to the prime minister, who approved it.

According to the statement, in line with the premier’s directives and considering the difficulties faced by taxpayers, the “Estimated Fair Market Value” column has been removed from the income tax return form.

It clarified that the column had been introduced solely for data collection to support the Economic Survey and had no bearing on the assessment of income or tax liability.

The FBR reaffirmed its commitment to facilitating taxpayers and urged all eligible individuals to file their returns accurately and in good faith before the Sept 30, 2025, deadline.

Published in Dawn, September 27th, 2025