Income Tax Act of 1922: prevalent in the British Raj and was adopted by the Government of Pakistan as its Income Tax Law. Income Tax Ordinance, 1979 was the first law on Income Tax which was promulgated in Pakistan from 1 July 1979 by Government of Pakistan. To update the tax laws and bring country's law in accordance with international standards, Income Tax Ordinance 2001 was promulgated on 13 September 2001, which became effective from 1 July 2002. IT rules 2002 were promulgated by FBR on 1 July 2002 in exercise of powers granted under section 237 of the Ordinance.
According to a 2002 study, 99% of 256 respondents reported facing corruption with regard to taxation. Furthermore, 32% of respondents reported paying bribes to have their tax assessment lowered, and nearly 14% reported receiving fictitious tax assessments until a bribe was paid.