Federal Board of Revenue (FBR) has launched a heightened campaign targeting high-risk taxpayers, primarily within the burgeoning real estate and retail sectors. Leveraging its sophisticated Compliance Risk Management (CRM) system, the tax authority aims to increase revenue collection and improve tax compliance among entities previously outside the formal tax system.
Sources within the FBR indicate that the focus on these sectors stems from their potential for significant undeclared income. The FBR is utilizing CRM analytics to identify patterns of irregular tax behavior specifically within real estate transactions and retail operations, alongside the corporate sector. This data-driven approach is designed to pinpoint individuals and businesses most likely to be evading taxes or underreporting income.
Broadening the Compliance Net
To effectively bring these high-risk individuals and businesses into the tax fold, the FBR is expanding its enforcement toolkit. Key measures include augmenting the number of tax auditors, initiating widespread notification campaigns to taxpayers, and significantly extending the integration of the Point-of-Sale (POS) system to encompass a larger number of retailers nationwide. The goal is to make it increasingly difficult for transactions to remain untracked.
Beyond real estate and retail, the FBR’s enhanced compliance strategy also includes rigorous scrutiny of import declarations. Particular attention is being paid to imports showing abnormal volume or value patterns, especially for goods susceptible to smuggling. The informal tobacco sector remains a significant challenge. In response, the FBR has implemented several measures, including mandatory use of bonded warehouses for acetate tow imports, prohibiting its transit to Afghanistan, and limiting such imports strictly to registered filter and tobacco manufacturers.
CRM System Rollout and Enhancement
Officials confirmed that the CRM systems are now fully deployed and operational within the Large Taxpayer Offices (LTOs) in major cities like Islamabad, Karachi, and Lahore, as well as across Corporate Tax Units. While currently relying on internal FBR data, plans are underway to integrate third-party data sources. This integration is expected to create a more comprehensive and automated framework for the identification of high-risk taxpayers.
Initial Progress and Legislative Push
Despite acknowledging limited success with the voluntary Tajir Dost Scheme, recent adjustments, particularly increases in withholding tax for unregistered businesses, have shown positive results. FBR data indicates a significant 51% year-on-year rise in tax filer registrations among retailers and a 38% increase in retailers declaring a positive tax liability as of January 2025. Building on this momentum, the FBR has put forward legislation to Parliament aimed at completely eliminating the “non-filer” status. The proposed bill would significantly restrict non-filers from engaging in major economic activities, specifically targeting real estate and vehicle transactions – areas frequently linked to individuals with high-risk tax profiles.
These assertive compliance measures underscore the FBR’s strong commitment to ensuring taxation equity, combating tax evasion, and effectively bringing a greater number of high-risk taxpayers into Pakistan’s documented economy.
