FBR Launches AI-Powered Electronic Scrutiny to Detect Tax Discrepancies

ISLAMABAD: The Federal Board of Revenue (FBR) has officially initiated the deployment of advanced artificial intelligence (AI) technologies to electronically scrutinize individual tax returns, aiming to identify factual and legal discrepancies before initiating any punitive legal action.

Under the newly proposed draft rules, the automated system will cross-match declared assets and income against external data sources to streamline tax compliance and broaden the national tax base.

The draft regulations, titled “38-B Procedure for electronic scrutiny and intimation of issues detected by the automated system,” have been introduced through comprehensive amendments to the Income Tax Rules 2002.

According to official sources, the automated platform will perform real-time analysis of taxpayer submissions, cross-referencing them with third-party financial databases.

If any anomalies or mismatches are detected, the system will automatically generate and dispatch online advisories or advance intimations to the taxpayers via the secure IRIS portal, detailing the exact nature of the errors.

This technological shift represents a major milestone in Pakistan’s ongoing tax digitization drive, aimed at reducing human intervention, curbing corruption, and minimizing harassment of compliant taxpayers.

By allowing citizens to rectify honest mistakes, clarify ambiguities, or take corrective actions before formal legal proceedings are launched, the FBR hopes to foster a more transparent and trust-based relationship with the business community and individual taxpayers, ultimately boosting national revenue collection and improving the ease of doing business.

The revenue authority has published the draft rules to solicit feedback from key stakeholders, including tax bars, chartered accountants, and the business community. These rules are scheduled to be finalized and formally implemented after a three-day consultation window, marking a decisive step toward fully automated tax administration in the country.

This transition is expected to significantly reduce the backlog of tax disputes and pave the way for a modern, tech-driven fiscal regime.