Prime Minister Muhammad Shehbaz Sharif has directed the Federal Board of Revenue (FBR) to complete its reform measures within the stipulated timeframe and ensure third party audits to assess their transparency, effectiveness and sustainability.
The directives came during a weekly review meeting on FBR reforms held in Islamabad, where the prime minister was briefed on the restructuring of PRAL, digitalization of the tax system and measures to curb smuggling and tax evasion.
Shehbaz said reforms in the tax system were being implemented to support the country’s development and emphasized that digitalization, production monitoring and automated systems were key pillars of the FBR’s reform agenda. He welcomed the appointment process for goods elevators with good reputations in the FBR and commended the FBR chairman and his team for their efforts.
The prime minister also directed authorities to intensify action against tax evasion, smuggling and illegal businesses. He ordered officials to accelerate reforms aimed at modernizing the tax system, improving revenue collection and completely eliminating smuggling.
The meeting was informed that phased work is underway on IRIS 3.0, the new tax operating model and a central data hub to make the tax system more modern, integrated and data driven. International consultants have been engaged to design IRIS 3.0, while new senior leadership appointments have been made at PRAL in technology, data security, operations and tax related areas.
Officials said work is progressing on further improving the tax system under IRIS 3.0, including plans to pilot the auto tax concept and eventually use artificial intelligence and machine learning to improve tax collection.
The meeting was also briefed on the impact of faceless assessment in customs. Average revenue per goods declaration increased by 12 percent from January to June 2026, while the system also improved the identification and monitoring of irregularities in imports.
The recruitment process for 280 goods elevators is in its final stages as part of efforts to further integrate the customs assessment system. Work is also underway to establish the Central Assessment Unit in Islamabad, which is expected to become operational under interim arrangements by December 31, 2026. A fully integrated facility is planned for activation in a new complex by June 2027.
Digital invoicing has also recorded a sharp increase. Transactions worth Rs. 236 billion were processed through digital invoicing in July 2025, compared with more than Rs. 2.5 trillion in July 2026. The government has set a target of Rs. 4 trillion in digital invoicing transactions by December 2026.
On efforts to curb smuggling, officials said several measures have been completed to prevent the illegal movement of petroleum products. These include GIS tagging of all legal petrol pumps, GPS tracking of petroleum products, linking the enterprise resource planning systems of oil marketing companies with the tracking system and developing a central tracking app for law enforcement agencies.
Through the Rah e Raftar app, authorities have shut down 2,500 illegal petrol pumps and taken legal action against them. Work is also continuing on digital monitoring of petroleum product sales and other anti smuggling measures.
Shehbaz directed officials to complete all FBR reform measures within the stipulated timeframe and ensure independent third party audits. He called for faster implementation of reforms to modernize the tax system, strengthen revenue collection and eliminate smuggling.
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