Islamabad( The COW News Digital)The Federal Board of Revenue (FBR) has launched a large-scale compliance campaign targeting discrepancies in sales tax returns, issuing over 11,000 “nudging notices” to companies and individuals across Pakistan. The notices were dispatched in July amid ongoing negotiations between the government and the business community over tax reforms.
According to official sources, the notices are not legally binding but serve as warnings aimed at correcting irregularities and encouraging tax compliance. Businesses that fail to rectify their records may face heavy penalties, frozen bank accounts, and even the sealing of their commercial premises.
FBR Chairman Rashid Langrial expressed concern over consistently low tax contributions by existing filers. In response, the FBR has implemented an advanced risk-based assessment system that analyzes tax records spanning the past five years. In the initial phase, notices were issued from corporate tax offices in Karachi, Lahore, and Islamabad.
The campaign has already drawn resistance from traders, particularly in Karachi and Lahore, where protests erupted over proposed changes, including restoring taxes on cash transactions exceeding Rs. 200,000 and granting FBR arrest powers.
FBR clarified that these notices are part of a behavioral strategy to reshape socio-economic attitudes towards taxation. The notices request taxpayers to voluntarily amend any inaccuracies in their sales tax returns, warning that continued non-compliance would be treated as defiance.
The department also signaled stricter enforcement measures if the discrepancies persist. These include on-site deployment of tax officers, financial penalties, and estimated tax assessments by commissioners.
The crackdown follows data-driven audits comparing sales tax filings with third-party data and peer businesses. The FBR identified several key irregularities in 2024 filings, such as misreporting taxable sales under exempt or lower-tax categories and underreporting value addition.
Some businesses were also found to have submitted unusually high refund claims, credit, and debit notes, prompting FBR to caution them about potential investigations and legal action.
Karachi Chamber of Commerce President Javed Bilwani criticized the move, arguing that the notices were issued without adequate public awareness or education efforts. However, FBR maintained that the initiative has already shown early signs of success, citing an uptick in July’s sales tax return submissions. A comprehensive impact analysis is expected after the August 4 deadline.
This marks one of the largest and most data-driven compliance efforts by the FBR in recent years.
