Tax audit, assessment: FBR implements faceless system

Business Recorder reported that the Federal Board of Revenue has activated a faceless system for audits, assessments and recovery actions, run through the National Faceless Centre with artificial intelligence support. The change starts on October 15, 2026, and is set out in SRO 1828(I)/2026 for income tax and SRO 1825(I)/2026 for sales tax. Under the income tax rules, the chapter covers every person or case, while the sales tax chapter reaches all persons and cases from the same date.

The framework applies only to cases designated under Section 122E of the Income Tax Ordinance, 2001, and not to every taxpayer automatically. Covered proceedings include audits under Sections 177 and 214C, proceedings under Section 111 and assessments under Chapter X. Audit, assessment and quality-control duties must sit with different officers or units when they concern the same case in a given tax year, a separation meant to keep each stage independent.

Notices and orders must be generated by the FBR's computerised system and bear a Digital Identification Number, while taxpayers submit replies and documents electronically through IRIS accounts. Physical verification can be done by the Field Operations Wing where needed, and cases can move to another tax authority in specified situations. Penalties under Section 182 and default surcharge under Section 205 now fall within the faceless procedures as well.