Sazgar Engineering Works Limited has disclosed that the Federal Board of Revenue (FBR) has raised a tax demand amounting to Rs188.9 million for the Tax Year 2023, according to the company’s latest quarterly and half-yearly financial statements filed with the Pakistan Stock Exchange (PSX) on February 4.
The demand stems from an order issued by the Additional Commissioner Inland Revenue (ACIR) on September 30, 2025, under Section 122(5A) of the Income Tax Ordinance, 2001. This provision allows tax authorities to amend assessments where they believe income has been underreported or incorrectly assessed.
In response, Sazgar has pushed back against the assessment, taking the matter through formal legal channels. The company has submitted a rectification application under Section 221 to the ACIR and has also filed an appeal before the Commissioner Inland Revenue (Appeals), signaling its intent to fully contest the demand.
Company management has expressed confidence in a favorable resolution and believes the tax claim does not represent a confirmed liability at this stage. As a result, Sazgar has not made any accounting provision for the disputed amount in its financial statements.
Sazgar emphasized that the case is still under review by the relevant tax authorities and appellate bodies. The company also reassured shareholders that it will continue to keep the market informed of any significant developments in line with PSX disclosure requirements.
For investors, the situation remains one to monitor rather than panic over. Tax disputes of this nature are not uncommon, and until a final decision is reached, the financial impact on the company remains uncertain.