The first phase of the AI-based tax system is scheduled to begin on October 1, with random case allocation aimed at improving transparency.
ISLAMABAD: Prime Minister Muhammad Shehbaz Sharif has directed the Federal Board of Revenue (FBR) to accelerate tax reforms and ensure the complete rollout of the Faceless Inland Revenue System by 2027, as the government seeks to improve tax administration, enforcement and transparency.
Chairing a review meeting on FBR reforms on Monday, the prime minister called for stronger action against smuggling, tax evasion and illegal businesses while directing the tax authority to intensify efforts to achieve the prescribed revenue target.
The prime minister also welcomed growing confidence among the business community in the government’s tax reform programme and directed the FBR chairman and senior officers to spend two days every month in Lahore, in addition to their monthly visits to Karachi.
He appreciated recent FBR enforcement operations against illegal cigarette manufacturing factories in Chakwal and Swabi and instructed the tax authority to appoint officers with strong reputations and integrity to sensitive posts and departments.
Faceless Tax System to Begin from October
The meeting was informed that the first phase of the Faceless Inland Revenue System will become operational from October 1, 2026.
Prime Minister Shehbaz directed the FBR to complete the system within the stipulated timeline and ensure its full implementation by 2027.
The AI- and advanced technology-based system is a major component of the FBR’s ongoing digitisation and tax administration reforms.
Under the new framework, a National Faceless Audit Wing will be established to conduct audits of tax returns, while a Faceless Assessment Unit will undertake tax assessments.
Cases will be assigned randomly under the system, irrespective of geographical jurisdiction. The mechanism is intended to improve transparency, minimise direct interaction between taxpayers and tax officials and reduce opportunities for undue influence.
FBR Steps Up Enforcement
The FBR chairman briefed the meeting on his regular visits to Karachi during the first week of each month and his engagement with the business community.
He said he had met representatives of seven major trade organisations in Karachi and discussed their concerns. According to the chairman, issues raised during these meetings were addressed promptly.
The meeting was also informed that the FBR was issuing time-bound standard operating procedures (SOPs) for the payment of tax refunds to exporters.
The measures are aimed at improving the efficiency of the refund process and providing greater certainty to exporters.
Action Against Illegal Cigarette Factories
The meeting reviewed intelligence-based enforcement operations against illegal cigarette manufacturing facilities in Chakwal and Swabi.
The Chakwal facility was sealed following the operation, while stocks of illegal cigarettes and manufacturing machinery were seized.
Prime Minister Shehbaz appreciated the enforcement actions and directed the FBR to maintain its focus on curbing tax evasion, smuggling and illegal businesses.
Focus on Tax Enforcement and Integrity
The prime minister stressed that effective tax enforcement must be accompanied by integrity within the tax machinery.
He directed the FBR to sustain the momentum of its reform programme and strengthen measures to improve revenue collection while enhancing services for taxpayers.
The government expects the Faceless Inland Revenue System to become a key element of its broader tax digitisation strategy. By removing geographical considerations from case assignments and limiting direct interaction between taxpayers and officials, the system is intended to create a more transparent and technology-driven tax administration.
The meeting was attended by Federal Ministers Azam Nazeer Tarar, Dr Musadik Masood Malik, Ahad Khan Cheema, Muhammad Aurangzeb, Attaullah Tarar and Shaza Fatima Khawaja, Special Assistant Haroon Akhtar, State Bank Governor Jameel Ahmad and senior officials of relevant institutions.