Karachi, January 26, 2026 – In a bold move signaling zero tolerance for tax evasion, the Large Taxpayers Office (LTO) Karachi has empowered its officials to spearhead an aggressive tax enforcement drive targeting banks and financial institutions.
While talking to PkRevenue, sources confirm that the LTO has delegated authority to assistant and deputy commissioners of Inland Revenue from all six units, enabling them to conduct detailed audits and assessments of prominent financial entities. The initiative includes a meticulously curated list of taxpayers under scrutiny, ensuring no major institution escapes regulatory oversight.
Officials have been authorized to act under Section 108 and Section 165B of the Income Tax Ordinance, 2001. Section 108 governs transactions between associations, while Section 165B mandates financial institutions, including banks, to furnish critical information on non-resident or reportable persons to the Federal Board of Revenue (FBR) in compliance with automatic exchange of information agreements. This includes overriding provisions in previous laws such as the Banking Companies Ordinance, 1962, and the Foreign Exchange Regulation Act, 1947.
The LTO has further instructed its units to adopt stringent measures, including the imposition of penalties and initiation of prosecution under Section 182 of the Ordinance, to ensure strict compliance. Analysts say this decisive operation underscores the FBR’s commitment to enhancing tax transparency, curbing financial irregularities, and reinforcing confidence in Pakistan’s financial ecosystem.
This comprehensive crackdown marks one of the most assertive tax enforcement campaigns in recent years, signaling that financial institutions can no longer delay adherence to statutory obligations without consequence.