FBR Issues Rs188.9 Million Tax Demand on Sazgar Engineering Works

FBR Issues Rs188.9 Million Tax Demand on Sazgar Engineering Works, The Federal Board of Revenue (FBR) has issued a tax demand of Rs188.9 million against Sazgar Engineering Works Limited for the 2023 tax year, according to the company’s recent financial disclosures submitted to the Pakistan Stock Exchange (PSX).

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FBR Assessment and Company Response

The tax demand was raised by the Additional Commissioner Inland Revenue (ACIR) through an order dated September 30, 2025, under Section 122(5A) of the Income Tax Ordinance, 2001. This provision allows the FBR to adjust or assess tax liabilities where discrepancies or under-assessments are identified during tax reviews.

In response, Sazgar Engineering Works has challenged the assessment, filing an application for rectification under Section 221 of the Income Tax Ordinance before the ACIR. The automaker has also lodged a formal appeal with the Commissioner of Inland Revenue (Appeals) against the order.

The company said it expects a favourable outcome from both the rectification request and the appeal process, and as a result has not made any financial provision for the disputed amount in its accounts.

Context in Broader Tax Enforcement

This development occurs amid heightened scrutiny by the FBR of corporate tax filings and assessments, particularly for publicly listed companies, as authorities work to strengthen tax compliance and revenue mobilisation.

While Sazgar’s challenge proceeds through the legal process, the case highlights ongoing tensions between Pakistan’s tax authority and corporate taxpayers over assessments and compliance obligations.