Government plans technology-driven tax reforms to curb evasion and improve transparency
Islamabad: The Federal Board of Revenue (FBR) is planning to introduce an AI-based tax system through the upcoming Finance Bill 2026 to identify false information in tax returns and strengthen enforcement against tax evasion.
The proposal was discussed during a high-level meeting in Islamabad chaired by Federal Minister for Economic Affairs Ahad Cheema to review tax enforcement measures for the federal budget 2026-27.
The meeting was attended by Federal Minister for Climate Change Musadik Malik, Advisor to the Prime Minister on Industries and Production Haroon Akhtar Khan, Minister of State for Finance Bilal Azhar Kayani, FBR Chairman Rashid Mahmood Langrial, Attorney General for Pakistan Mansoor Usman Awan, and senior officials.
AI-based monitoring system under consideration
During the briefing, FBR officials presented several proposals aimed at reducing the tax gap, curbing underreporting, preventing under-invoicing, and controlling smuggling activities.
Among the major proposals was the introduction of an AI-based tax system capable of detecting false declarations and suspicious transactions in tax returns through automated digital monitoring mechanisms.
Officials said the proposed system would help strengthen oversight, minimize tax fraud, and improve documentation in the economy through technology-driven enforcement tools.
E-auction system for confiscated goods proposed
The meeting also discussed plans to introduce an electronic auction system for confiscated customs goods to improve transparency and efficiency in the disposal process.
According to officials, the digital auction mechanism would reduce manual intervention and enhance accountability within customs operations.
Government seeks business-friendly reforms
Federal Minister Ahad Cheema emphasized that the government intends to implement tax reforms while maintaining a business-friendly environment and supporting economic growth.
He stated that the government supports a tax administration framework with minimum human interaction to improve transparency and reduce opportunities for corruption and discretionary practices.
“All reforms should be practical, technology-oriented and capable of delivering effective results,” the minister said during the meeting.
Focus on digital transformation of tax administration
Participants agreed that digitally automated systems and technology-based solutions are essential for modernizing Pakistan’s tax administration system.
The government reiterated its commitment to:
• Broadening the tax base
• Improving revenue collection
• Enhancing transparency
• Reducing tax evasion
• Promoting sustainable economic growth
The proposed AI-based tax system is expected to become one of the major reform initiatives under the Finance Bill 2026 as Pakistan moves toward digital tax enforcement and automated compliance monitoring.