A meeting chaired by Prime Minister Shehbaz Sharif on Monday to review ongoing reforms process in the Federal Board of Revenue (FBR) was informed that step-by-step work was underway on IRIS 3.0, a new tax operating model, and a central data hub to make tax system modern, integrated and data-driven, as international consultants have also been hired to design IRIS 3.0. The PM instructed the authorities concerned to implement reformative measures within the stipulated timeframe and to intensify enforcement against tax evasion, smuggling and illegal businesses.
There is no denying the fact that incumbent government launched a comprehensive process of reforms in the FBR and its implementation has resulted in substantial increase in revenue collection in recent years. The modernisation programme included digital transformation, anti-smuggling tech and strict merit-based administrative restructuring. It hired 957 third party auditors to check accounts and make tax collection honest and the PM has given directions to carry out a third party audit of the entire system to ensure it delivers in a fair manner. A Central Assessment Unit is set for an interim launch in December 2026 and its full completion is expected in June 2027 and hopefully it will further strengthen efforts aimed at enhanced revenue collection. Introduction of merit-based hiring and a new review system rewards high-performing tax officers and penalizes under-performers to reduce corruption. Digital billing is yet another initiative that complements efforts for documentation of economy and its success can be gauged by the fact that digital billing grew rapidly from Rs.236 billion in July 2025 to over Rs. 2.5 trillion in June 2026. Smuggling inflicts heavy losses in respect of revenue collection and it is appreciable that at least some success has been achieved as far as smuggling of oil and its sale is concerned. GPS tracking of oil products and GIS mapping for petrol stations while Raah-Guzar app has helped shut down about 2,500 illegal petrol pumps. However, much needs to be done to curb smuggling of other items and increase revenue collection by bringing untaxed or under-taxed segments of the society. Return filing has been simplified and streamlined as is evident from the data that automatically loads during the process and hopefully IRIS-3 will make the system more user-friendly.
