Pakistan’s government is introducing tough new tax rules in the Finance Bill 2026-27 to improve compliance and increase revenue collection. The Federal Board of Revenue (FBR) will now impose heavy penalties on taxpayers who ignore official notices.
According to the proposed reforms, ignoring an FBR notice for the first time could cost Rs1 million (Rs10 lac). Repeated violations may lead to even higher fines, up to Rs2 million. This change aims to reduce delays and force quicker responses from taxpayers.
Businesses required to install FBR’s electronic tax monitoring systems (such as point-of-sale integration or production monitoring) will face strict action if they fail to do so. Tampering with, damaging, or disabling these systems can result in fines of Rs1 million for the first offence and Rs1 million for each following violation. In serious cases, offenders may also face up to five years in prison.
The new rules also make electronic filing through the IRIS portal mandatory for income tax returns. Companies must submit financial records in a digital, machine-readable format. To support businesses, the FBR plans to offer rebates of up to Rs30 million for installing approved monitoring systems.
These measures are part of a bigger push toward full digital tax enforcement starting July 1. These changes will help reduce tax evasion but may create challenges for small businesses during the transition.
