Karachi, October 2, 2025 – Pakistan State Oil (PSO), the country’s largest energy supplier, has disclosed a series of income tax contingencies in its financial statements up to June 2025, highlighting long-standing disputes with the Federal Board of Revenue (FBR). The company outlined multiple assessments raised by the tax authorities, many of which are currently under litigation before appellate forums and higher courts. According to the disclosure, the Additional Commissioner Inland Revenue (ADCIR) passed several contentious orders in recent years. One major development occurred on March 26, 2025, relating to Tax Year 2024, which created a demand of over Rs. 568 million. PSO challenged the decision at the Islamabad High Court (IHC), where the court has suspended the order and merged it with a broader constitutional challenge against the Alternate Dispute Resolution Committee (ADRC) under Section 134A of the Income Tax Ordinance, 2001. The company, relying on its legal advisors, believes the matter will ultimately be decided in its favor and therefore made no provision in its accounts. Similarly, for Tax Year 2020, an order raised a demand of Rs. 59.4 million, which was later upheld at multiple appellate levels. However, PSO again sought relief before the IHC, maintaining its position that the ADRC framework lacks constitutional validity. Parallel disputes exist for Tax Years 2021, 2022, and 2023, involving tax demands running into billions of rupees. In each case, the company emphasized that based on legal counsel, there is a strong likelihood of success. The disclosure also revisited older assessments dating as far back as 2009. For instance, during Tax Year 2014 and 2015, the FBR raised staggering demands exceeding Rs. 35 billion, which were later rectified to Rs. 3.6 billion. Following appeals and rectifications, the figure was reduced to approximately Rs. 2.5 billion. Disputes from earlier years, including Tax Years 2009 to 2013, also remain under consideration before the Appellate Tribunal Inland Revenue (ATIR). PSO clarified that despite the massive figures involved, no accounting provisions have been recorded against these disputed demands. The…