KARACHI – A dramatic turn for Pakistan’s corporate sector as Sazgar Engineering Works Limited found itself in crosshairs of Federal Board of Revenue. The apex tax authority slapped company with Rs188.9 million demand for 2023 tax year, sparking a legal battle that has the business community watching closely.
The auto-giant however challenged claim, filing appeals and insisting the demand is unjustified, all while assuring investors that its operations remain financially sound and uninterrupted.
FBR issued hefty Rs188.9 million tax demand against leading automobile manufacturer Sazgar Engineering Works Limited for the 2023 tax year. The company has formally challenged the demand, signaling a potential high-stakes showdown.
According to disclosures filed with Pakistan Stock Exchange (PSX), the demand was issued by Additional Commissioner Inland Revenue (ACIR) through an order dated September 30, 2025, under Section 122(5A) of Income Tax Ordinance, 2001. The order followed a reassessment of Sazgar’s income tax liabilities for the year in question.
The company has not taken the claim lightly, and filed a rectification application under Section 221 with the ACIR and has also lodged a formal appeal with the Commissioner Inland Revenue (Appeals). Expressing confidence in a favorable outcome, the company has not made any financial provision for the disputed amount in its quarterly or half-yearly accounts.
In its statement, the company management mentioned this tax demand is unjustified and expects it will be resolved through the legal remedies available,” the company noted in its PSX filing.
The timing of the action is important as authority has been intensifying scrutiny of corporate tax filings, particularly for listed companies, as part of broader efforts to boost revenue collection and ensure compliance.
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