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Pakistan’s tax authority has raised a significant tax claim against a leading automobile manufacturer. The Federal Board of Revenue (FBR) has issued a Rs. 188.9 million tax demand to Sazgar Engineering Works Limited for the tax year 2023, a move the company has formally challenged.
According to disclosures submitted to the Pakistan Stock Exchange (PSX) on February 4, the demand was issued by the Additional Commissioner Inland Revenue (ACIR) through an order dated September 30, 2025, under Section 122(5A) of the Income Tax Ordinance, 2001.
The order relates to a reassessment of Sazgar’s income tax liabilities for the relevant tax year.
Sazgar Engineering has contested the assessment and filed a rectification application under Section 221 before the ACIR. In addition, the company has also submitted a formal appeal with the Commissioner Inland Revenue (Appeals).
In its filing, Sazgar stated that it expects a favorable outcome from both proceedings. Based on this expectation, the company has not made any financial provision for the disputed amount in its quarterly and half-yearly financial statements.
“The management believes that the tax demand is unjustified and will be resolved through the available legal remedies,” the company noted in its disclosure.
The development comes at a time when the FBR has intensified scrutiny of corporate tax assessments, particularly for listed companies, as part of broader efforts to improve revenue collection and compliance.
Sazgar Engineering, known for manufacturing motorcycles, three-wheelers, and assembling electric vehicles, remains financially stable, and the dispute is not expected to disrupt its core operations in the short term.
