PM Shehbaz Approves Centralised Litigation System to Speed Up Tax Dispute Resolution

Prime Minister Shehbaz Sharif has approved the establishment of a Centralised Litigation Management System (CLMS) along with a comprehensive overhaul of the legal framework of the Federal Board of Revenue to expedite the resolution of tax-related cases across the country.

The decision was taken based on recommendations by a task force led by Shad Muhammad Khan, who previously played a key role in reconciling litigation at the Supreme Court of Pakistan, facilitating the resolution of around 1,800 cases within a year.

According to the task force report, approximately 2,800 tax cases are currently pending before the Supreme Court—significantly lower than earlier estimates of 5,000 to 6,000 cited by the FBR. Of these, about 1,600 cases relate to Inland Revenue Service (IRS) matters, while nearly 1,200 involve customs disputes.

Officials informed the meeting that the Alternate Dispute Resolution (ADR) mechanism has already generated Rs24 billion for the national exchequer this year, highlighting its effectiveness in resolving disputes outside traditional court proceedings.

The newly approved CLMS aims to enhance transparency, accuracy, and efficiency in managing tax litigation. It will introduce a digital platform for tracking and reporting cases, reducing misreporting, and ensuring timely resolution of disputes.

Prime Minister Shehbaz Sharif directed that the system be implemented at the earliest and instructed the task force to submit a detailed timeline within one week. He also emphasized the need to recruit competent human resources for the legal wing of the FBR strictly on merit.

The reform package includes a six-point action plan featuring the creation of case scrutiny committees, linking officers’ performance evaluations with litigation outcomes, and strengthening institutional mechanisms. It also предусматривает the appointment of directors of tax law at provincial and regional levels to improve coordination and legal oversight.

Under the plan, these directors will work closely with legal officers at Regional Tax Offices (RTOs) to enhance case management and ensure stronger representation in high courts and tribunals.

The prime minister noted that ongoing digitisation and reforms within the FBR are already producing positive results and reiterated the importance of making the ADR system more effective to reduce the burden on courts and ensure swift resolution of tax disputes.