ISLAMABAD: The Federal Board of Revenue (FBR) is planning to introduce an AI-based tax monitoring system through the upcoming Finance Bill 2026 to identify false declarations in tax returns and strengthen action against tax evasion.
The proposal came under discussion during a high-level meeting held in Islamabad and chaired by Federal Minister for Economic Affairs Ahad Cheema to review tax enforcement measures for the federal budget 2026-27.
The meeting was attended by Federal Minister for Climate Change Musadik Malik, Adviser to the Prime Minister on Industries and Production Haroon Akhtar Khan, Minister of State for Finance Bilal Azhar Kayani, FBR Chairman Rashid Mahmood Langrial, Attorney General for Pakistan Mansoor Usman Awan, and senior government officials.
During the meeting, FBR officials presented multiple proposals aimed at reducing the tax gap, preventing underreporting, curbing under-invoicing, and controlling smuggling activities across different sectors of the economy.
One of the key proposals discussed was the launch of an AI-powered tax system capable of detecting false information, suspicious transactions, and irregular declarations in income tax returns through automated digital monitoring tools.
Officials said the proposed system would strengthen tax oversight, reduce tax fraud, and improve economic documentation through technology-based enforcement mechanisms. The AI-driven monitoring model is also expected to minimize manual scrutiny and improve compliance checks within the tax system.
The meeting further reviewed plans to introduce an electronic auction system for confiscated customs goods to improve transparency and efficiency in customs operations.
According to officials, the proposed e-auction mechanism would reduce human intervention, streamline the disposal process, and enhance accountability in the handling of seized goods.
Federal Minister Ahad Cheema stressed that the government wants to implement tax reforms while maintaining a business-friendly environment to support economic growth and investor confidence.
He said the government favors a tax administration system with minimal human interaction in order to improve transparency and reduce corruption and discretionary practices.
“All reforms should be practical, technology-oriented, and capable of delivering effective results,” the minister said during the meeting.
Participants agreed that digitally automated systems and AI-based solutions are essential for modernizing Pakistan’s tax administration framework and improving enforcement capabilities.
The government reiterated its commitment to broadening the tax base, improving revenue collection, enhancing transparency, reducing tax evasion, and promoting sustainable economic growth through digital transformation.
The proposed AI-based tax monitoring system is expected to become one of the major tax reform initiatives under the Finance Bill 2026 as Pakistan moves toward automated compliance monitoring and digital tax enforcement.
