FBR Notifies Business Community Representatives for Pre-Arrest Consultation in Tax Fraud Cases

The Federal Board of Revenue (FBR) has notified the list of nominated representatives from the business community who must be consulted before any investigation is ordered to arrest a businessman on charges of tax fraud.

Since the announcement of the federal budget for 2025-26, no FIR has been registered against any businessman on charges of tax fraud.

In this regard, the FBR issued a notification on Thursday, listing the representatives of the business community.

According to the FBR’s notification, and in line with Sales Tax General Order (STGO) No. 02 of 2025, the Board has nominated representatives from the business community as required by the referenced STGO.

Representatives have been included from the Pakistan Business Council, Lahore Chamber of Commerce & Industry (LCCI), Federation of Pakistan Chambers of Commerce & Industry (FPCCI), All Pakistan Textile Mills Association (APTMA), Multan Chamber of Commerce & Industry, Quetta Chamber of Commerce & Industry, Hyderabad Chamber of Commerce & Industry, and Sarhad Chamber of Commerce & Industry.

Without this consultation process, no investigation against a businessman will be approved by the FBR Member (Inland Revenue Operations).

The FBR has already issued a detailed procedure for investigation prior to any arrest of businessmen under STGO No. 2 of 2025, released on Wednesday.

The notification regarding the pre-arrest committee, as per Section 37A of the Sales Tax Act, 1990, and the agreement to include two representatives from the business community from the relevant zone, has also been issued by the FBR. This measure is intended to safeguard the business community from undue pressure or action, as the presence of two business community members on the committee will ensure fair representation.

According to the earlier STGO, the following procedure must be followed before initiating any investigation that could lead to action under sub-sections (8) and (9) of Section 37A of the Sales Tax Act, 1990:

• An inquiry shall not be initiated unless approval from the Commissioner has been obtained.
• After the conclusion of the inquiry, the Commissioner shall not approve the initiation of an investigation unless he has obtained approval from the Member (Inland Revenue Operations) of the Board.
• Before seeking approval from the Member (Inland Revenue Operations), the Commissioner is required to consult with two representatives of the business community, selected from those notified by the Board.
• The Board shall notify a list of business community representatives on the FBR’s web portal.
• Trade organizations mentioned in the STGO shall each nominate two persons (who should be compliant and significant taxpayers) and send their names to the Member Inland Revenue Operations at FBR Headquarters.

The Member Inland Revenue Operations will nominate two persons for each region for consultation, selected from among those nominated by the trade organizations, based on their income tax payments for the latest tax year, exports, and compliance history.

The Member Inland Revenue Operations shall not select more than one person from a nominating trade organization in any one region.