Budget 2026-27: Govt Weighs AI Tools to Curb Tax Evasion

The government on Wednesday reviewed a series of tax enforcement proposals for the upcoming federal budget, with a strong focus on using technology and artificial intelligence to curb tax evasion and improve revenue collection.

The proposals came under discussion during a special meeting chaired by Economic Affairs Minister Ahad Cheema, where Federal Board of Revenue Chairman Rashid Mahmood Langrial briefed participants on measures being considered for the 2026-27 budget.

According to an official statement issued by the Economic Affairs Division, the proposed measures are aimed at addressing under-reporting, non-reporting, under-invoicing, tax evasion, and smuggling through stronger monitoring and digital enforcement systems.

Among the key proposals discussed was the introduction of AI-based systems designed to identify false information in tax returns and improve the detection of irregular reporting patterns.

Participants also reviewed digital monitoring mechanisms intended to strengthen oversight and improve documentation across the tax system. Another proposal under consideration is the introduction of an electronic auction system for confiscated customs goods aimed at improving transparency and efficiency in disposal procedures.

During the meeting, Ahad Cheema emphasized the government’s support for a tax system involving minimum human interaction, highlighting broader plans to digitize tax administration and reduce opportunities for discretion and corruption.

The discussion comes as Pakistan prepares its upcoming federal budget under pressure to increase tax collection and broaden the tax base while avoiding major new taxes.

The Federal Board of Revenue has increasingly relied on enforcement and technology-driven measures over the past two years, including data integration, retail monitoring systems, and digital documentation initiatives to improve compliance and reduce revenue leakages.