The Federal Tax Ombudsman has taken notice of FBR’s failure to operationalize an important tax concession available to qualifying women-owned enterprises. Clause 19 of Part III of the Second Schedule to the Income Tax Ordinance allows eligible women enterprises a 25% reduction in tax payable on business profits, yet according to the FTO, the necessary mechanism remained unavailable in the IRIS return-filing system years after the concession was introduced through the Finance Act, 2021.
The relief broadly applies to qualifying businesses established on or after July 1, 2021, including a sole proprietorship owned by a woman, an association of persons consisting entirely of women, or a company whose entire shareholding is held by women. However, the concession is not available where the enterprise results from the transfer, reconstruction, reconstitution or splitting up of an existing business. Despite the legal entitlement being recognized by FBR itself, the absence of an operational tax code in IRIS prevented eligible taxpayers from conveniently claiming the benefit.
The FTO held that failure to translate a statutory tax concession into the electronic filing system amounted to maladministration and directed FBR to operationalize the relevant facility. The decision carries a broader message for taxpayers: a limitation in IRIS should not, by itself, extinguish a substantive relief expressly granted under tax law. Where legislation provides an entitlement but the system does not facilitate it, the underlying legal right may still require protection through appropriate representation or remedial proceedings.