FBR to gradually audit millions of income tax returns to combat evasion

Islamabad  (Web Desk): The Federal Board of Revenue (FBR) has decided to gradually audit millions of income tax returns as part of its efforts to improve transparency in the tax system and curb tax evasion.

According to FBR sources, the audit will focus on individuals who underreport their income, pay minimal taxes, or engage in tax evasion. In the first phase, desk audits will be conducted for short filers, low taxpayers, and those who conceal their actual income.

Taxpayers found to have discrepancies in their returns will undergo physical audits. The initial phase will target 700,000 to 1 million returns, including those from salaried individuals, the corporate sector, major investors, CEOs, and government officials.

In cases of misrepresentation or income concealment, heavy fines and legal action will be imposed. The audit process will leverage advanced Artificial Intelligence (AI) and data analytics systems for desk audits and analysis.

Sources indicate that individuals who paid 25% less tax compared to the previous year will also be scrutinized. The FBR has approved its audit plan for 2025, and it is estimated that by November 30, the number of tax returns may exceed 7 million.