FBR officers to be posted at business premises to enhance tax monitoring

The Federal Board of Revenue (FBR) officers will be posted at business premises to enhance tax monitoring under a new amendment, as Prime Minister Muhammad Shehbaz Sharif directed authorities on Monday to intensify their crackdown on tax evasion, under-invoicing, and other financial irregularities across multiple sectors.

While chairing a high-level meeting to assess the performance of the FBR, the prime minister was briefed on three significant amendments introduced to address critical gaps in Pakistan's tax system. These amendments, which were implemented through the Tax Laws (Amendment) Ordinance, 2025, aim to strengthen the legal, administrative, and enforcement mechanisms within the taxation framework.

One of the key changes involves the posting of FBR officers at business premises under Section 175C. This move is designed to enhance the monitoring of revenue collection in high-end services and industries that are not currently covered by the existing sales tax regime.

However, the amendment will not affect traders already governed by Section 40B of the Sales Tax Act 1990. This new approach aims to bring greater uniformity across sectors, ensuring that oversight is extended to areas previously not fully regulated. The initiative is also intended to combat Pakistan’s extensive underground economy, which is estimated to account for more than 30% of the national GDP.

During the meeting, the prime minister expressed his full support for proposed amendments to the Income Tax Ordinance and the Federal Excise Act, stating that these changes are intended to ease the process of tax recovery while ensuring legitimate taxpayers are not unduly burdened.

“These amendments aim to protect honest taxpayers and prevent unnecessary harassment of businesses and companies by FBR officials,” the prime minister said, adding that the reforms would also “simplify the tax payment process and help expand the tax net, ultimately reducing the burden on the common citizen.”

Officials briefed the premier on the steps currently being taken to combat tax evasion in critical sectors. Among the tools being rolled out are digital monitoring systems, such as the Track and Trace mechanism, to improve transparency and enhance enforcement.

The meeting was informed that significant progress had been made in identifying irregularities within industries such as tobacco, cement, sugar, poultry, and beverages. Video monitoring has played a key role in uncovering violations, and the FBR is now establishing a dedicated monitoring framework for the poultry sector.

Additionally, provinces have been granted legal authority to confiscate smuggled or tax-evading tobacco products, further strengthening enforcement at the regional level.

Federal Ministers Azam Nazeer Tarar, Ahsan Iqbal, and Muhammad Aurangzeb, along with FBR Chairman and other senior officials, were present during the session.