Karachi, September 22, 2024 – The Federal Board of Revenue (FBR) has announced its decision to utilize Artificial Intelligence (AI) for an in-depth examination of income tax returns and wealth declarations submitted for the tax year 2024.
This strategic shift is part of FBR’s broader initiative to modernize tax compliance processes and enhance the accuracy and efficiency of its auditing mechanisms.
According to insider sources at the FBR, the organization has made comprehensive arrangements to conduct a meticulous AI-based examination of declared incomes and assets. The AI system will evaluate the tax returns based on specific benchmarks, allowing the FBR to identify discrepancies, underreporting, or potential tax evasions with greater precision.
Focus on High-Value Transactions
Individuals conducting substantial banking transactions during the tax year are expected to be a primary focus of the AI examination. The FBR has noted a record increase in banking deposits as of June 30, 2024, and plans to scrutinize these transactions rigorously. In addition to banking activity, AI will monitor high-value property deals, vehicle purchases, and international travel, all of which are typically indicators of taxable income that may not be fully declared.
The application of AI aims to streamline the process of identifying potential tax discrepancies, ensuring that individuals and businesses comply with the tax code and contribute their fair share to the national exchequer. The FBR’s reliance on data-driven technology reflects a shift towards a more proactive approach to tax collection, minimizing human error and inefficiencies in the audit process.
FBR Determined to Enforce Deadline
The FBR has made it clear that the deadline for filing income tax returns for the 2024 tax year will not be extended beyond September 30, 2024. In a statement made earlier, FBR spokesperson Bakhtiar Muhammad emphasized the importance of timely submissions, urging citizens to avoid a last-minute rush. He cautioned that no grace period or filing extensions would be granted, reinforcing the urgency of adhering to the deadline.
“Taxpayers must submit their returns promptly,” said Bakhtiar Muhammad. “By ensuring timely compliance, we are fostering a culture of tax responsibility, which is critical for the economic stability and growth of the country.”
The FBR is adamant that the introduction of AI will expedite its ability to process returns and detect anomalies, which will ultimately boost revenue collection for the government. The spokesperson emphasized that fostering tax compliance would contribute to Pakistan’s broader economic goals, including fiscal stability, better infrastructure, and social welfare initiatives.
Leveraging Modern Technology for Tax Compliance
The AI initiative is part of the FBR’s ongoing efforts to revolutionize its tax system through the integration of advanced technologies such as data analytics and machine learning. These tools will enable the FBR to identify tax evasion more effectively and refine the auditing process, resulting in faster and more accurate verifications.
In parallel with the AI system, the FBR is focusing on upgrading its tax infrastructure and making the tax filing process more user-friendly. The Iris portal, FBR’s digital tax submission system, is designed to simplify the process for taxpayers, reducing errors and improving accessibility. The platform has undergone continuous enhancements to ensure it meets the growing needs of taxpayers, allowing them to file returns efficiently without facing technical hurdles.
The FBR has also prioritized building a highly skilled and professional workforce to support its modernization efforts. Through comprehensive training and development programs, the FBR aims to cultivate a culture of professionalism and integrity among its employees, fostering a motivated and high-performing team capable of addressing the complexities of modern tax administration.
As Pakistan navigates its fiscal challenges, the integration of AI into the tax system represents a significant step toward ensuring accountability, transparency, and improved revenue collection for the country’s future economic success.
