The new regime will separate taxpayers from tax officials during assessment, audit and related proceedings through a National Faceless Centre.
ISLAMABAD: The Federal Board of Revenue (FBR) has outlined a new faceless sales tax assessment regime that will apply from Tax Year 2027 onwards, aimed at separating taxpayers from tax officials during assessment, audit and related proceedings.
According to FBR Circular No. 1 of 2026, the Finance Act, 2026 introduced a comprehensive faceless framework into the Sales Tax Act, 1990.
The definition of “assessment” under section 2(17A) has been expanded to include faceless assessment, while a new section 32C provides for the establishment of a National Faceless Centre.
National Faceless Centre to conduct proceedings
The National Faceless Centre will conduct sales tax proceedings through electronic means and may comprise a Director General, Chief Commissioners, Commissioners and other prescribed authorities.
Its wings and units will perform separate functions, with audit, assessment and quality control in a specific case and tax period assigned to different officers.
All communication between the relevant units and registered persons or their authorised representatives will take place electronically.
The separation of functions is intended to create a more structured assessment process while reducing direct interaction between taxpayers and individual tax officials.
Faceless audits and e-hearings introduced
Under newly inserted section 11H, audits under sections 25 and 72B for cases specified by the Board may also be conducted through the faceless system.
Where a hearing or statement on oath is required, proceedings will be conducted through an e-hearing.
The identity of the officer conducting the proceedings, including their facial and voice identity, will remain confidential under the new framework.
This provision establishes electronic hearings as part of the faceless assessment and audit process while maintaining the confidentiality of the officials involved.
Appeals can also be processed electronically
The new section 45C allows appeals under section 45B to be processed through the National Faceless Centre.
Meanwhile, section 30AA provides faceless jurisdiction to Inland Revenue authorities appointed at the centre.
Such jurisdiction may be exclusive or concurrent, while the identity of the authority exercising jurisdiction will remain confidential.
Notices and assessments cannot be challenged solely on confidentiality
The amended law further provides that notices, orders, demands or assessments cannot be challenged solely on the grounds of lack of jurisdiction or the confidentiality of the authority’s identity.
The new framework represents a significant shift towards technology-based administration of sales tax proceedings.
By separating assessment, audit and quality-control functions and conducting communication and hearings electronically, the FBR aims to establish a more structured and digitally managed sales tax assessment process from Tax Year 2027.