The Federal Board of Revenue (FBR) has proposed a new digital surveillance system aimed at improving tax compliance and detecting financial irregularities. The plan focuses on real-time integration of banking data with tax records.
Under the proposed Section 165AB of the Finance Bill 2026–27, all banks and Electronic Money Institutions will be required to submit account information electronically. This data will be sent to a centralized data hub for automated analysis.
The FBR system is designed to cross-check banking activity with declared income. This will help identify possible cases of tax evasion more efficiently and accurately.
According to the proposal, the system will operate alongside existing financial laws. These include the Banking Companies Ordinance 1962 and the State Bank of Pakistan Act 1956. However, the new framework will override certain limitations to ensure data sharing.
Banks will be required to report detailed financial data for account holders. This applies when total deposits or withdrawals exceed Rs. 100 million within a six-month period.
The information will include opening balances, closing balances, peak credit levels, and total transaction volumes. This data will cover all accounts held by an individual across different institutions.
The FBR will not directly view the raw data during initial processing. Instead, automated systems will match financial records with tax declarations to identify discrepancies.
If significant mismatches are detected, the system will forward the case to the Compliance Risk Management (CRM) unit. Further investigation and action will then be taken by relevant authorities.
The reporting cycle will be divided into two periods each year. These include July to December and January to June. Banks will submit reports within specified deadlines in January and July.
The Finance Bill also introduces clearer definitions of banking terms. This includes definitions for accounts, deposits, and peak credits to standardize reporting procedures.
In addition, the proposal allows the State Bank of Pakistan to develop a secure financial data repository. This system will support the FBR in monitoring financial activity more effectively.
Officials say the initiative aims to reduce tax evasion and improve transparency in the financial sector. The FBR believes that digital monitoring will strengthen compliance and expand the tax base over time.
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The proposal is now under review as part of the Finance Bill 2026–27. If approved, it will mark a major step toward digital tax enforcement in Pakistan.
