ISLAMABAD: Prime Minister Shehbaz Sharif has approved a Centralised Litigation Management System (CLMS) and an overhaul of the tax machinery’s legal system nationwide to expedite the disposal of genuine tax litigation.

The prime minister took the decisions on the recommendations of a task force headed by former senior Inland Revenue Service (IRS) officer Shad Muhammad Khan, who helped reconcile litigation cases at the Supreme Court and facilitated the resolution of around 1,800 cases within a year.

The task force report revealed that the total number of tax cases pending before the Supreme Court of Pakistan stood at 2,800, significantly lower than the 5,000 to 6,000 cases earlier cited by the Federal Board of Revenue (FBR).

Of the total, around 1,600 cases pertained to IRS matters, while approximately 1,200 were related to customs disputes, according to the report presented to the prime minister. Moreover, officials informed the meeting that decisions on tax disputes through the Alternate Dispute Resolution (ADR) forum have so far generated Rs24 billion for the national exchequer this year.

CLMS aims to speed up dispute resolution with transparency

The prime minister directed the head of the task force, Shad Muhammad Khan, to submit a report within one week with a timeline for the implementation of the CLMS. He said the CLMS should be established at the earliest. He also instructed officials to engage competent human resources in the legal wing of the FBR as required, ensuring that merit is strictly observed in all such appointments.

Officials said the proposed system is expected to significantly reduce misreporting of legal cases and the amount of tax involved, while improving transparency and accuracy in case management.

During the meeting, the task force presented a six-point reform-based action plan. The plan includes the formation of case scrutiny committees, the establishment of the CLMS, linking the performance reports of officers, including commissioners, with litigation outcomes, as well as introducing other institutional reforms.

It was stated that a digital CLMS will be developed to organise tax litigation data. The new system will improve tracking and reporting of tax disputes, facilitating their timely resolution.

Under the approved plan, the legal system of the FBR will be overhauled through the appointment of directors of tax law at provincial or regional levels.

These directors will coordinate with officers at the additional level designated as legal officers at each RTO to strengthen case management and oversight. Officials said the directors, in coordination with field formations, will pursue tax litigation at high courts and tribunal levels to ensure more effective legal representation.

An official announcement issued by the Prime Minister Secretariat said that the premier stated that ongoing digitisation and reforms in the FBR were yielding positive results.

The prime minister appreciated the efforts of Mr Shad and others for preparing the report with dedication and hard work. He approved the action plan presented by the task force and directed that it be submitted with clear timelines.

The prime minister further instructed that the Alternate Dispute Resolution system be made more effective for the swift resolution of tax disputes. He said this would reduce the burden on courts and ensure timely decisions in tax-related cases.

Published in Dawn, May 6th, 2026