The Federal Board of Revenue (FBR) has proposed a significant digital monitoring system aimed at curbing tax evasion through real-time integration of banking and tax data.
Under Section 165AB of the Finance Bill 2026–27, all banking companies and Electronic Money Institutions (EMIs) would be required to electronically transmit selected account information to a Central Data Hub, where it will be automatically matched with taxpayers’ declared income.
If implemented, the system would override existing financial and banking secrecy provisions, including those under the Banking Companies Ordinance 1962 and the State Bank of Pakistan Act 1956.
The proposed framework is designed to accurately compare individuals’ financial activity with their declared income to identify potential tax discrepancies.
Banks will be required to report detailed data for account holders whose total deposits or withdrawals exceed Rs. 100 million within a six-month period. This includes opening and closing balances, peak credit levels, and overall transaction volumes across all accounts held by an individual.
The information will be processed through automated systems, with no direct access for tax officials during the initial screening phase.
Where significant mismatches are identified, cases will be escalated to the Compliance Risk Management (CRM) system for further review and action.
The reporting cycle has been defined as two half-year periods—July to December and January to June—with submission deadlines set for January and July. The bill also introduces formal definitions of banking terms such as “accounts” and “peak credits” to standardize reporting.
Additionally, the amendment authorizes the State Bank of Pakistan to establish and maintain a secure financial data repository to support regulated information sharing and improved financial oversight.
