Pakistan's FBR drafts rule to flag income tax return errors by machine

Pakistan's FBR drafts rule to flag income tax return errors by machine

7 October 2026: Pakistan's Federal Board of Revenue has published a draft rule that would let an automated system scrutinise individual income tax returns and point out factual and legal errors before any legal or penal action starts. The draft adds a new rule 38-B, titled "Procedure for electronic scrutiny and intimation of issues detected by the automated system", to the Income Tax Rules 2002.

Not yet independently verified. We could not open the draft on the Federal Board of Revenue site, so the text is taken from two news outlets that agree with each other. The final rule may differ after the stakeholder feedback period. We will update this when it can be confirmed, and remove this note.

Under the draft, the system cross-matches what a taxpayer declared in the return against other information held by the tax authorities. When it finds a discrepancy, the taxpayer receives an advance intimation online through the IRIS portal. Each intimation must state a response period of at least seven days. If the taxpayer does not reply, a reminder follows and allows a further period of at least seven days.

The draft also limits what a flag can lead to. A discrepancy found by the system does not by itself start enforcement. The Inland Revenue officer with jurisdiction over the taxpayer reviews the response first, and the draft says that officer can also send a system-generated intimation.

Media reports say the draft was put out for a short stakeholder feedback period of three days before it is finalised. Dawn reports that some of the public reaction was critical, arguing that the effort targets taxpayers who already file rather than widening the tax base or reaching non-filers.

The rule covers individual income tax returns. Companies and sales tax filers are not described in the reports on this draft. For anyone who files in Pakistan, or advises people who do, the practical point is that notices will arrive inside IRIS, so the portal inbox is where the seven-day clock starts. Filers who rely on an accountant or a tax software provider to monitor IRIS should confirm who watches it and how quickly a flagged return is passed on for a reply.

Sources

• Dawn: FBR introduces rules for electronic scrutiny of taxpayers, 7 October 2026
• TechJuice: FBR to flag tax return errors through automated scrutiny system, 7 October 2026