The Federal Board of Revenue (FBR) has introduced stricter financial conditions for Inland Revenue and Customs field formations seeking recurrent budget funds for the fiscal year 2026-27. The new instructions are aimed at improving financial discipline and preventing unauthorized spending across departments.
According to official directions issued on Monday, the FBR has warned officials against exceeding approved budget limits. It also stressed that all government funds must be used according to the applicable financial laws and regulations.
Under the new policy, heads of departments and field offices will be personally responsible for ensuring that approved budgets are implemented correctly. They must also make sure that all financial decisions follow the required legal framework.
The FBR said all offices must comply with the Public Finance Management Act, 2019, General Financial Rules, Financial Regulations, Treasury Rules, and other instructions issued by regulatory authorities and the Board’s headquarters.
The latest decision follows a review of the SAP Budget Execution Report for the fiscal year 2025-26. According to the review, several field offices spent more than their approved budget allocations under different heads of account.
The tax authority found that some of these expenditures were not admissible under existing financial rules. These unauthorized expenses resulted in budget overdrafts, raising concerns about financial management and internal controls.
To prevent similar issues in the future, the FBR has made it clear that department heads, controlling officers, and Drawing and Disbursing Officers will be held personally accountable for any violations of financial regulations.
Officials responsible for unauthorized spending may also face disciplinary proceedings under the Efficiency and Discipline Rules. The Board emphasized that financial accountability remains a key priority for all field formations.
The directive also states that offices involved in unauthorized expenditures will not receive budget reappropriations or additional funds until the excess amounts have been fully adjusted or recovered.
This measure is intended to encourage better financial planning and prevent departments from relying on additional allocations after exceeding their approved budgets.
To strengthen oversight, the FBR has instructed all Inland Revenue and Customs field formations to establish an effective system for monitoring monthly expenditures and budget utilization.
The monitoring process must include detailed reconciliation of financial records before reports are submitted to the Board. Officials have been directed to review not only actual expenditures but also original budget allocations, approved reappropriations, surrendered funds, supplementary grants, monthly spending, cumulative expenditures, and the remaining available budget.
The Board believes that regular monitoring and timely reconciliation will improve transparency and reduce the risk of financial irregularities. It also expects the new system to help departments manage public funds more efficiently throughout the fiscal year.
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The latest instructions reflect the FBR’s broader effort to strengthen financial governance and ensure that all government offices follow approved budget procedures. By enforcing stricter accountability and closer monitoring, the Board aims to improve budget management and reduce unauthorized spending across its field formations.
