The Federal Board of Revenue will brief Prime Minister Shehbaz Sharif on Monday on the implementation status of the FBR faceless system on the Inland Revenue side, together with a wider transformation plan and digital steps meant to narrow a tax gap of about Rs1 trillion across 18 sectors.
Sources said FBR Headquarters stayed open on Sunday to finalise the presentation. Officials are also expected to cover the use of artificial intelligence to analyse returns, the build-out of a digital ecosystem, and comprehensive proposals on human-resource reform, revamping and restructuring of the tax machinery. Integrity issues in the board’s field formations are also under the prime minister’s notice, according to those familiar with the matter.
What the prime minister will hear
The Prime Minister’s Office has directed the FBR to present proposals on HR reforms and organisational restructuring. The high-level review of ongoing reforms will be chaired by the prime minister. Tax authorities plan to describe an integrated digital system that links the economic value chain—from the production and import of raw materials, through manufacturing, to consumer purchases—so that centralised data can support economic decision-making.
Closing the gap between actual and potential collection is a central theme. Sources put the shortfall at roughly Rs1 trillion in 18 sectors. Completing sales-and-production monitoring in major industries by the end of December is part of that effort.
Faceless audits already under way
Separately, the board has brought into force a framework for conducting tax audits, income-tax assessments and related income-tax and sales-tax recovery proceedings through the National Faceless Centre, with artificial-intelligence support, from 15 October 2026.
Notifications issued that Friday activated Chapter XX of the Income Tax Rules, 2002, and Chapter VIAC of the Sales Tax Rules, 2006, for every person or case covered by those chapters from that date. The income-tax chapter applies to cases designated under Section 122E of the Income Tax Ordinance, 2001—not automatically to every taxpayer. Covered work includes audits under Sections 177 and 214C, proceedings under Section 111, and assessments under Chapter X.
Under the rules, audit, assessment and quality-control roles must sit with separate officers or units for the same case and tax year. Notices and orders are to be generated through the board’s computerised system with a Digital Identification Number. Taxpayers and authorised representatives must file replies and evidence electronically through their IRIS accounts. Physical verification may still take place through the Field Operations Wing where authorised, and cases can be transferred when records or repeated checks require special handling. Penalty and default-surcharge proceedings under Sections 182 and 205 are also brought within the faceless procedures for relevant designated cases.
Digital monitoring across industries
Digital monitoring is already fully installed in sugar, cement, tobacco, tiles and fertilisers. Installation is under way in textile, packaged water, packaged juice and packaged milk. Equipment purchases for steel, poultry and tyres were completed by 15 October; purchases for tea, household electronics, leather, paper and board, and oil and ghee are due by 30 October.
Officials say a restructured board is intended to strengthen administration, raise transparency and improve economic decision-making—goals that will sit alongside the FBR faceless system update in Monday’s briefing.
Timeline: what has happened so far
- Friday (before 15 October 2026): Notifications brought the income-tax and sales-tax faceless chapters into force from 15 October 2026.
- 15 October 2026: Faceless proceedings via the National Faceless Centre took effect for designated cases; equipment purchases for steel, poultry and tyres were completed.
- Sunday: FBR Headquarters remained open to finalise the prime minister’s presentation.
- Monday: The FBR briefs Prime Minister Shehbaz Sharif on faceless implementation, digital measures and reform proposals.
- 30 October: Equipment purchases for tea, household electronics, leather, paper and board, and oil and ghee are scheduled for completion.
- End of December: Sales-and-production monitoring in major industries is targeted for completion.
Aasan alfaaz mein
FBR wazir-e-azam ko faceless tax system aur digital reforms ki progress bataane ja rahi hai. Is tareeqe mein designated audit cases zyada tar computer aur AI ke zariye chalenge, bina seedha office aane-jane ke. Hukumat 18 sectors mein lagbhag 1 trillion rupay ka tax farq kam karna chahti hai. Agar aapka case designate ho, to jawab aur papers IRIS account se electronic bhejne pad sakte hain.
