The Federal Board of Revenue has introduced an electronic system for examining sales tax returns and notifying businesses when possible discrepancies are detected.
The procedure was established through SRO 1655(I)/2026, which adds new rules to the Sales Tax Rules, 2006.
Under the system, FBR’s computerised checks can identify possible errors or inconsistencies in information submitted by registered taxpayers. Businesses will receive notifications through the IRIS online tax portal.
The purpose is to give taxpayers an opportunity to explain an issue or correct their return before the matter proceeds to formal legal action.
For example, a business may be asked to clarify differences between sales figures, purchase records, invoices and the tax amounts declared in its return.
An electronic notification does not automatically mean a taxpayer has committed an offence or owes additional tax. It indicates that the system has identified an issue requiring attention.
It also places greater importance on accurate recordkeeping. Businesses will need to ensure that their invoices and sales tax declarations are consistent with the information available to FBR.
Taxpayers receiving a notification should review the details and respond through the prescribed IRIS process.
The effectiveness of the system will depend on how accurately it identifies discrepancies and how fairly taxpayers’ explanations are handled.
For Pakistan’s businesses, the immediate change is a more formal digital process for identifying and addressing sales tax issues before they become enforcement cases.