A. Background

1. We also refer to the related Important TLQCs in trail, blue, italic and double Line (a) 3320 of 27.10.25 about 3320=Life Style Monitoring Cell uncovered Hidden Assets and KC Recommendation (b) 3298 of 7.10.25 about Tax on Marriage Halls & Functions - On FBR Radar

2. We also refer to several Other TLQCs including (a) 3343.14.25 about Hotels, etc related PRA 489 Appeals Infructuous u/s 39 as per LHC & KC Views (b) 3102 of 2.5.25 about 3102= Salaried Class Tax in 3 Years - mostly by your Goodself Category

B. Updated Commentary

1. Further to KQU 3656 dated 18.11.25, being an important matter, we would inform you about Wedding halls under pressure as FBR intensifies tax inspections  (Attachment 3356.1) in the ensuing paragraph, with emphasis in bold & Underline for quick reading.

2. Wedding halls in Lahore and other parts of Pakistan say they are facing growing pressure from the FBR. As soon as a family books a venue for a wedding, they receive a call from the FBR asking about the number of guests and the total cost of the event.

3. This is because the FBR has imposed an advance adjustable withholding tax on all events held at marriage halls, marquees, hotels, restaurants, clubs, and community centers. The tax also applies to services like catering and decoration. It is collected from the person who books the event, not the hall owner, and is calculated as a percentage of the total bill.

4. According to Khurrum Shehzad, information secretary of the Lahore Marriage Hall Association, the average cost of a wedding function in Lahore is around Rs200,000. “Even if there are 150 guests and the per-head rate is Rs1,200, the total becomes Rs200,000. Out of this, Rs20,000 goes as withholding tax,” he said.

5. He explained that most people hosting weddings belong to middle or lower-income families. “Some save through committees, some sell their jewellery or household items, and some borrow money. Sometimes relatives pay for the food. But even then, the FBR demands Rs 20,000 tax,” he said.

6. Khurrum argued that the advance tax system is also unfair. “They tell us to pay tax even before a sale or event happens. First pay the advance tax, then do business. We already pay heavy electricity bills that include taxes. Now there is advance tax too,” he said.

7. He said the most troubling issue for hall owners is harassment during inspections. “Teams enter wedding halls during functions, disturb guests, count chairs, question the cooks, and even go into washrooms asking people where they came from and what they ate. This is disrespectful. Guests feel embarrassed, and the host’s dignity is hurt,” he said.

8. He added that uniformed officers create panic. “Guests think the police have arrived. They cannot tell if the officers are from FBR or the Police. People start asking if there is some fight or problem. It becomes very embarrassing,” he said.

9. To solve the issue, the Association has suggested that the FBR should fix a flat tax instead of a percentage. “They can take Rs 2,000, Rs 3,000, or Rs 5,000 per event depending on the category of the hall. But the three percent rate is unfair because not everyone can afford it,” Khurrum said.

10. There are around 500 marriage halls in Lahore, and almost all are checked by many departments. “Around eight departments inspect us. First FBR, then the Food Department, Punjab Food Authority, Intelligence Department, LDA, TEPA, WASA, and the district government. Everyone demands something,” he said.

11. Although inspectors have not directly asked for bribes, their behaviour has caused business losses, he said. “Clients feel disturbed, bookings drop, and our reputation suffers. These inspections create unnecessary pressure,” he added.

12. Mr Khurrum also confirmed that there is no ban on weddings on weekends. “No, that is not true. There is no such restriction,” he said.

13. He said the Association is not against taxes but wants a fair and respectful system. “We are ready to cooperate with FBR, but the process should not involve harassment. Tax collection should be easy and dignified,” he said.

14. When asked about the issue, Chief Commissioner Amina Faiz Bhatti forwarded the matter to her deputy, Chaudhry Mr Murtaza Ali Akbar. He said wedding halls should follow the law and cooperation would make things smooth. He added that he had recently met the Association. He said the final say lies with Mr Bilal Hassan, Commissioner IR (WHT Zone).

15. Hall owners say another problem is the lack of fairness in treating all halls the same. Khurrum said halls vary greatly: some are very luxurious, some are moderate, some serve middle-class families, and some cater to low-income people. “A uniform tax rate for all halls is unfair and impractical,” he said.

16. He explained that a poor man often organizes his daughter’s wedding after saving for years, while rich families can host lavish events. “So there must be a difference in tax rates. A poor man should not be taxed the same as a rich man,” he said.

17. The Association has proposed dividing halls into four categories, such as A, B, C and D, and charging each a fixed tax. Small D-category halls should pay around Rs 2,000 to Rs3,000 per event, medium halls around Rs 10,000, better halls around Rs 15,000, and premium halls around Rs 20,000 to Rs 25,000.

18. Mr Khurrum said a fixed-rate system would reduce tax evasion and harassment. “If percentage-based taxes continue, people will hide rates. This creates corruption, pressure, and mistrust,” he said.

19. He said Sindh and Faisalabad have already introduced fixed tax systems with positive results, and Lahore should follow the same model.

C. Further Details & Services

Should you require any clarification or explanations in respect of the above or otherwise, or require Income Tax, Federal & Provincial Sales Tax or Withholding Tax Statement, Advisory, Return Filing or Review services, please feel free to email Mr Amsal at amsal@kasbati.co with CC to info.kasbati@professional-excellence.com, asif.s.kasbati@professional-excellence.com.