The Federal Board of Revenue (FBR) has proposed a major digital surveillance mechanism to detect tax evasion through real-time integration of banking and tax records.
Under Section 165AB of the Finance Bill 2026–27, all banking companies and Electronic Money Institutions (EMIs) will be required to electronically submit specified account data to a Central Data Hub for automated cross-matching with tax records.
If approved, the mechanism will operate despite provisions of existing banking and financial laws, including the Banking Companies Ordinance 1962 and the State Bank of Pakistan Act 1956.
The system is designed to perfectly compare financial activity with declared income to identify tax evasion.
Banks will report detailed information for account holders whose total deposits or withdrawals exceed Rs. 100 million during a six-month reporting period. This will include opening and closing balances, peak credit levels, and aggregate transaction volumes across all accounts held by an individual.
The data will be processed through automated systems and will not be directly visible to tax officials during the initial matching stage.
In cases where significant mismatches are detected, the information will be routed to the Compliance Risk Management (CRM) system for further action.
The bill defines the reporting cycle as two half-year periods: July to December and January to June, with corresponding submission deadlines in January and July. It also formally defines banking terms such as “accounts” and “peak credits” for clearer reporting.
The proposed amendment allows the State Bank of Pakistan to develop and maintain a secure banking data repository to facilitate regulated data sharing and financial monitoring.