FBR Launches AI-Based Audit Drive to Review Tax Returns Nationwide
The Federal Board of Revenue (FBR) has kicked off a nationwide audit using artificial intelligence (AI) to review more than seven million income tax returns. This major step aims to strengthen tax compliance and identify cases where declared income does not match financial activity.
Who Will Be Scrutinized?
Under the new policy, any tax return showing tax payments below 25% of the required amount will be flagged for review. The audit will be supported by:
8,000 Inland Revenue officers, and
4,000 auditors across Pakistan
FBR expects the total number of filers this year to reach eight million, making this one of the largest audits ever conducted in the country.
How Will the Audit Work?
FBR will use a three-step system powered by data analytics and AI:
Stage 1:
Commercial and industrial taxpayers
Stage 2:
Sole proprietors and registered companies
Stage 3:
Individuals and salaried persons
Before AI tools analyze the data, initial filtering will be done using Excel-based screening, followed by deeper inspection with automated systems.
Taxpayers who have paid more than 25% tax based on their declared income will not be included in this review.
What Is FBR Looking For?
The audit will examine returns from eight different angles, including:
Income vs. lifestyle
Undeclared assets
Unusual deductions
Mismatched bank transactions
Sector-specific discrepancies
FBR has also stated it will review situations where a taxpayer’s social media lifestyle does not match their declared income.
Strict Action for False Information
Authorities warn that serious action will be taken against those who:
Underreport income
Hide assets
Provide misleading information in their returns
The purpose of the audit is not only to detect fraud, but also to improve overall transparency and strengthen Pakistan’s tax system.
Where Things Stand Now
As of October 31, more than 5.9 million individuals and businesses had filed their returns—bringing in an additional Rs 9 billion in revenue. With AI and automation now part of the audit process, FBR aims to make compliance faster, fairer, and more effective.