ISLAMABAD: Tax advisors have raised concerns about alleged coercion by tax officials, pressuring taxpayers to withdraw complaints filed with the Federal Tax Ombudsman (FTO) regarding deliberate delays in refund issuance.

These refunds, due as a result of an appeal order by the Tribunal—which had attained finality a year ago—were being obstructed despite no reference being filed before the Lahore High Court.

Experts argue that the establishment of the “Refund Zone” within tax offices, purportedly to streamline the process, has instead become a tool for selective approvals and additional bureaucratic hurdles.

Miss Sofia, an Income Tax Practitioner and representative of a Lahore-based taxpayer assessed at a Large Taxpayer Office (LTO), recounted her experience. Upon following up on a refund claim, she was informed by an Additional Commissioner that approval would only be granted if the taxpayer withdrew their complaint from the FTO. She was further warned that if the FTO ruled the delay as maladministration, a representation would be filed before the President, delaying the refund for at least another year.

Sofia highlighted that a partial refund was previously issued only after a writ petition was filed, and the remaining amount was directed for release by the Appellate Tribunal along with compensation for delays. Despite multiple reminders and in-person follow-ups, no action was taken, prompting the taxpayer to file a complaint with the FTO. Following the FTO’s intervention, the concerned officer processed the refund in the IRIS system but faced administrative delays from higher officials, who allegedly leveraged the process to force the complaint’s withdrawal.

She condemned this as blatant blackmail and called upon the Chairman of the Federal Board of Revenue (FBR) to address this misconduct, which she believes damages the integrity of the tax department.