FBR proposes AI monitoring, e-auctions in tax reform push

May 14, 2026 (MLN): Artificial intelligence systems capable of detecting false data in tax returns and a digital auction platform for goods seized by customs authorities are among the enforcement measures under active consideration for Pakistan's upcoming federal budget.

As the government moves to close a widening tax gap through technology rather than expanded human oversight.

The proposals were reviewed in a high-level meeting chaired by Federal Minister for Economic Affairs Ahad Cheema.

The meeting was attended by Federal Minister for Climate Change Musadik Malik, Advisor to the Prime Minister on Industries and Production Haroon Akhtar Khan, Minister of State for Finance Bilal Azhar Kayani, Chairman Federal Board of Revenue (FBR) Rashid Mahmood Langrial, and Attorney General for Pakistan Mansoor Usman Awan.

The FBR briefed participants on a range of measures targeting underreporting, non-reporting, under-invoicing, tax evasion and smuggling five persistent fault lines in Pakistan's tax collection architecture.

Central to the proposals is the deployment of AI-based systems to cross-check tax return data and flag discrepancies, alongside broader digital monitoring mechanisms designed to strengthen compliance without increasing direct human intervention in business affairs.

A separate proposal involves the introduction of an e-auction system through which customs authorities would dispose of confiscated goods a move intended to bring transparency and efficiency to a process that has historically been vulnerable to procedural gaps.

Cheema stated during the meeting that the government does not intend to create hurdles in the business environment and expressed full support for a tax system with minimum human interaction, according to the press release.

All participants agreed that digitally automated, technology-driven solutions represent the most viable path forward for tax reform, with a shared emphasis on maintaining a business-friendly environment alongside revenue optimisation.

The FBR has been directed to further refine all proposed measures before they are finalised, with the instruction that reforms must be practical, technology-oriented and capable of delivering effective results.

The government's stated objectives through the reforms include broadening the tax base, enhancing transparency and modernising tax administration to support fiscal stability and sustainable economic growth.

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