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assessor’s findings, a massive tax demand could be finalised against them. The taxpayer was then required to pay 20 percent to 35 percent of that disputed sum just to seek legal redress,” he said.

He, however, raised a concern from the other direction, noting that the deposit rate will fall to as low as 4 percent in some cases.

“Will this low threshold enable non-compliant businesses to evade immediate liability and keep disputes pending indefinitely before the High Court on a mere 4 percent deposit? Could it inadvertently institutionalise a culture of strategic litigation? These are the structural risks that policymakers and revenue authorities must tightly monitor as they execute this reform,” he said.

Speaking on condition of anonymity, another tax analyst, however, cautioned that the one percent deposit requirement at the first stage for income tax cases could also discourage some taxpayers from pursuing legitimate appeals.

An official at the National Board of Revenue said the intent behind the reform was not to make it easier to avoid paying taxes, but to make the system less punishing for businesses with legitimate grievances.

“Our preference is that revenue is collected through the regular tax system rather than through prolonged disputes and court cases,” the official said on condition of anonymity.

On the risk of misuse, the official noted that while upfront deposits have been reduced, interest charges on disputed amounts remain unchanged.

That means a business that files a frivolous appeal and loses will still owe the full amount plus accumulated interest, making delay a costly strategy in the long run.

The government also reviewed how similar systems work in neighbouring countries and other international jurisdictions before designing the proposal, the official added.