Pakistan’s Federal Board of Revenue has proposed draft rules for an automated system to flag possible errors in tax returns and notify taxpayers before legal or penalty proceedings begin.
Draft Rule 38-B would introduce electronic scrutiny of individual income tax returns and cross-check declared information against data held by tax authorities. The proposal would amend the Income Tax Rules, 2002. Dawn reported that the draft was due to be finalised after three days of stakeholder feedback.
The system would send advance notices through the IRIS portal identifying possible factual or legal discrepancies. Taxpayers could explain the information or correct an error before legal or penalty proceedings begin. An automated flag alone would not trigger enforcement.
The draft gives taxpayers at least seven days to respond. If they do not reply, a reminder would provide at least seven more days. An Inland Revenue officer would then review the response—or the lack of one—before deciding whether action under the law is warranted.
The FBR has published the proposal for consideration. It retains the tax officer’s role in assessing discrepancies, with automation serving as an initial layer of review. It remains a draft, not an adopted rule.