The Federal Board of Revenue (FBR) has announced major tax relief for residents of Azad Jammu and Kashmir (AJK) and Gilgit-Baltistan (GB) by allowing them to be included in Pakistan’s Active Taxpayers List (ATL). The move enables eligible individuals to benefit from filer tax rates on financial and business transactions carried out within Pakistan.
Under a newly notified income tax amendment, the FBR will include taxpayers from AJK and GB in the Active Taxpayers List if they are already registered as active taxpayers with either the Azad Jammu and Kashmir Central Board of Revenue or the Gilgit-Baltistan Council Board of Revenue.
To implement the decision, the FBR has issued SRO.2423(I)/2025, proposing draft amendments to the Income Tax Rules, 2002.
According to the notification, a person will be included in the Active Taxpayers List under section 181A of the Income Tax Ordinance if their temporary or permanent address is located in Azad Jammu and Kashmir or Gilgit-Baltistan.
In cases where a person’s temporary and permanent addresses fall within Pakistan, the concerned Commissioner Inland Revenue will verify through the IRIS system that the individual does not have employment or business activities in Pakistan. This verification will be conducted following an inquiry and upon obtaining an undertaking from the taxpayer.
Simultaneously, the relevant Commissioner of the Azad Jammu and Kashmir Central Board of Revenue or the Gilgit-Baltistan Council Board of Revenue will confirm the existence of employment or sole business within their respective regions through IRIS.
The FBR has clarified that if, at a later stage, the Commissioner Inland Revenue determines that a person included in the Active Taxpayers List is required to file an income tax return under section 114 of the Income Tax Ordinance and fails to comply with a notice issued under sub-section (4), the individual’s name will be removed from the Active Taxpayers List.
The initiative is aimed at facilitating taxpayers from AJK and Gilgit-Baltistan by enabling access to filer tax rates in Pakistan, while maintaining safeguards to prevent misuse of the facility.
