ISLAMABAD – Hefty bank transactions used to go unnoticed back in the day but from July 1, FBR’s new digital system will start tracking Rs10 crore banking activity in a fresh push against tax evasion.
Tax authorities in Pakistan expand their oversight of high-value banking activity under new digital compliance system designed to identify potential tax evasion and undisclosed income.
After recent changes in Budget 2026-27, banks and Electronic Money Institutions (EMIs) will be required to report customers whose combined deposits or withdrawals exceed Rs10 crore within any six-month period. The move is part of the government’s broader effort to strengthen tax enforcement through technology-driven monitoring.
The reporting mechanism, introduced through Section 165AB of the Income Tax Ordinance, 2001, mandates financial institutions to electronically submit specified transaction data to a secure Central Data Hub, even where existing banking secrecy laws would otherwise apply.
Authorities said uploaded information will undergo algorithm-based cross-matching with tax records to identify discrepancies such as underreported income, concealed sales, inflated business expenses, and missing tax disclosures.
Banks will be required to provide detailed financial information, including total deposits and withdrawals, opening and closing balances, peak credit balances, and total credits across all accounts held by a customer. The reporting requirement covers current, savings, fixed deposits, term deposits, call accounts, and other deposit accounts.
The data will initially be processed through an automated system, with tax officers unable to directly access customer information during the screening stage. Only cases flagged for significant inconsistencies will be transferred to the Compliance Risk Management (CRM) system for further examination through the National Faceless Centre.
Central bank has also been empowered to establish and maintain secure centralized virtual repository of banking information using customers’ unique identifiers. The system will enable the collection and sharing of financial data for regulatory and tax compliance purposes.
Federal Board of Revenue (FBR) has pledged to maintain strict confidentiality of the information received, stating that banking data will only be used in accordance with legal provisions and protected from unauthorized disclosure.
The initiative is intended to improve tax compliance by using digital analytics rather than manual investigations, allowing authorities to identify high-risk cases more efficiently while reducing unnecessary scrutiny of compliant taxpayers.
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