ISLAMABAD: To facilitate overseas Pakistanis, the Karachi Tax Bar Association (KTBA) has urged the Federal Board of Revenue (FBR) to modify the IRIS system to allow individuals returning to Pakistan after a period of non-residence to enter their appropriate opening wealth balance for Tax Year 2026.
In a letter to FBR Member Inland Revenue (Operations) on Friday, the KTBA said the existing restriction in the Wealth Reconciliation Statement was creating difficulties for individuals who resumed tax residency after spending intervening years as non-residents.
The association pointed out that IRIS automatically carries forward the opening wealth balance from the last Wealth Statement filed and does not allow taxpayers to edit it. Consequently, the system retains the wealth balance reported before the period of non-residence, preventing returning taxpayers from accurately reconciling their wealth for the relevant tax year.
The KTBA illustrated the issue with the case of an individual who was a Pakistani tax resident up to Tax Year 2023 and filed an income tax return, Wealth Statement and Wealth Reconciliation Statement for that year. The individual subsequently remained a non-resident during Tax Years 2024 and 2025, declaring only Pakistan-source income and not filing Wealth Statements, as these were not required under section 116(2) of the Income Tax Ordinance, 2001, in the circumstances described.
Upon returning to Pakistan and becoming a resident during the period relevant to Tax Year 2026, the individual is required to furnish a Wealth Statement and Wealth Reconciliation Statement under section 116(2) of the Ordinance. However, the IRIS system automatically carries forward the wealth balance as of June 30, 2023, into a non-editable opening balance field, creating difficulties in reconciling wealth for Tax Year 2026.
The association maintained that, under the self-assessment and declaration framework of income tax laws, taxpayers should be allowed to declare their opening wealth balance on the basis of relevant information and records, subject to applicable legal provisions.
Without prejudice to this broader position, the KTBA urged the FBR to address the specific issue by modifying the relevant IRIS validation to allow returning individuals to enter an appropriate opening wealth balance for the relevant tax year.
It said the proposed change would enable affected taxpayers to reconcile their wealth for Tax Year 2026 without being required to undertake a reconciliation covering the intervening years of non-residence.
The association further emphasised that the IRIS 2.0 filing utility should facilitate compliance with section 116(2) without extending the scope of the statutory obligation.
The KTBA requested urgent resolution of the matter to enable affected individuals to correctly complete and submit their Wealth Statements and Wealth Reconciliation Statements for Tax Year 2026.
Copyright Business Recorder, 2026