FBR Gives Intelligence Unit New Powers to Hunt Tax Evaders and Shady Businessmen

The Federal Board of Revenue (FBR) has granted additional powers to the Director of the Directorate General of Intelligence & Investigation (Inland Revenue) to approve the initiation of inquiries against businessmen involved in tax fraud.

However, this authority is conditional on obtaining prior approval from the FBR Member IR (Operations).

The FBR amended Sales Tax General Order (STGO) 2 of 2025 through a notification issued on Tuesday, formally including the Director of Intelligence & Investigation (Inland Revenue) alongside the Commissioner of Inland Revenue.

Under the revised STGO, an inquiry cannot be initiated without the prior approval of either the Commissioner or the Director of Intelligence & Investigation (Inland Revenue). After completing an inquiry, approval to initiate a formal investigation can only be granted after consulting the FBR Member IR (Operations).

Before seeking this final approval, it is mandatory for the Commissioner or Director to consult with two representatives of the business community, selected from the list notified by the Board, the revised procedure states.

Previously, under Sales Tax Circular No. 02 of 2025-26, a new sub-section (4) in Section 37 of the Sales Tax Act empowered Inland Revenue officers to exercise powers of a civil court under the Code of Civil Procedure, 1908.

The Finance Act 2025 further streamlined powers and procedures for inquiry and investigation into sales tax fraud. Under the new framework, an officer of Inland Revenue may initiate an inquiry only after obtaining approval from the Commissioner, based on material evidence indicating tax fraud or other offenses warranting prosecution.