Banks and Electronic Money Institutions will electronically share high-value transaction data with the FBR under a new automated compliance and risk assessment framework.
ISLAMABAD: The Federal Board of Revenue (FBR) has been empowered to obtain financial transaction data from banks and Electronic Money Institutions (EMIs) under the Finance Act, 2026, introducing an automated reporting framework aimed at strengthening tax compliance through digital analytics and risk-based enforcement.
According to FBR officials, the Finance Act, 2026 inserts new provisions requiring banks and EMIs to electronically submit specified financial information to the FBR’s central data hub, where it will be subjected to algorithmic cross-matching with taxpayers’ records.
The law states that, notwithstanding the provisions of the Banking Companies Ordinance, 1962, the State Bank of Pakistan Act, 1956, the Protection of Economic Reforms Act, 1992, or any other law for the time being in force, banks and EMIs must furnish the prescribed information to the tax authority.
The reporting obligation applies to account holders whose aggregate deposits or withdrawals exceed Rs100 million during the relevant reporting period.
Under the new framework, banks and EMIs will be required to electronically upload key financial information, including total deposits and withdrawals, opening and closing account balances, peak credits and total credits recorded during the reporting period.
The Finance Act further provides that the uploaded information will initially be processed through an automated system and will not be accessible to any income tax authority during the algorithmic cross-matching stage.
Where the automated system identifies a significant mismatch between an account holder’s banking transactions and tax records, the case will be referred to the FBR’s Compliance Risk Management System (CRMS) for further analysis.
If additional action is considered necessary, subsequent proceedings will be conducted through the National Faceless Centre (NFC) as part of the government’s broader digital tax administration reforms designed to reduce direct interaction between taxpayers and tax officials.
The legislation also introduces safeguards for the protection of banking information. The FBR is required to maintain the confidentiality of financial data and is prohibited from disclosing or misusing such information except in accordance with the applicable laws governing commercial banking and tax administration.
Tax experts said the automated reporting mechanism marks a significant step towards data-driven tax enforcement by enabling the FBR to identify potential tax discrepancies through digital cross-matching rather than manual scrutiny. They added that the framework is expected to improve documentation of the economy, strengthen compliance among high-value taxpayers and minimise human intervention while preserving confidentiality safeguards for account holders.