The Federal Board of Revenue (FBR) has issued a stern warning to telecom companies and internet service providers (ISPs) in Pakistan, threatening legal action for their failure to provide critical subscriber information. This initiative is part of an aggressive crackdown on sales tax fraud and cybercrime, with tax authorities seeking to trace fraudulent activities back to their source.
The FBR’s new authority comes from a recently implemented sub-section (5) of Section 38B of the Sales Tax Act, 1990. This amendment empowers the Commissioner Inland Revenue to directly request and obtain subscriber details, including Internet Protocol (IP) addresses, from any ISP, telecom operator, or the Pakistan Telecommunication Authority (PTA) to assist in sales tax fraud investigations.
This measure follows a high-profile case highlighted by the Federal Tax Ombudsman (FTO). The case involved a fraudulent incident on April 29, 2025, where a suspect’s IP address was traced to Battagram, Khyber Pakhtunkhwa. The telecom provider, Zong (CM Pak Ltd), reportedly failed to respond to multiple requests for the subscriber’s details. Other suspicious IPs were linked to locations in Islamabad and Frankfurt, Germany, with the latter likely involving a Virtual Private Network (VPN).
Effective since July 1, 2025, all telecom and mobile operators are now legally obligated to provide accurate subscriber information upon request. Failure to comply will lead to severe legal consequences. In addition to this, the FBR plans to implement new security measures to prevent the misuse of VPNs on its online portal, aiming to accurately identify individuals engaged in fraudulent activities and ensure a more secure and transparent digital tax system.
