Govt Empowers FBR Officers With SHO-Like Powers

The FY2025-26 budget has empowered the Federal Board of Revenue (FBR) officers with the authority to inspect audit and chartered accountancy firms involved in preparing income tax returns. These inspections will be conducted if discrepancies are suspected in a taxpayer’s return. Buyers of vehicles or immovable property must now prove that the asset’s value does not exceed 130 percent of their declared income from the previous tax year. A formal application to the FBR is required to verify that the funds, whether they’re in the buyer’s name or that of a spouse or child. The FBR will be authorized to share taxpayer data with commercial banks. Banks must match deposit and investment records with declared income and report mismatches to the FBR for enforcement action. New powers also allow the FBR to shut down unregistered bank accounts, expanding its earlier authority, which only permitted freezing accounts for recovery purposes. Proposed amendments to Section 58C of the Income Tax Ordinance will give the FBR direct access to the offices of tax advisers and audit firms in cases of suspected discrepancies. The definition of sales tax fraud will be broadened to include anyone assisting in fraud, making them liable for prosecution. The FBR will also tighten goods movement monitoring, particularly for sugar, through an enhanced tracking system.