The Federal Board of Revenue (FBR) has announced a major initiative to audit millions of income tax returns, aiming to identify undeclared income and misstatements.

Taxpayers found submitting false or incomplete returns may face heavy fines and legal consequences.

In the first phase, the FBR will scan between seven to 10 million returns, covering salaried and corporate taxpayers. Officials confirmed that returns of big capitalists, CEOs, and government officers will also come under scrutiny.

The audit aims to detect discrepancies, hidden income, and misstatements to ensure compliance with tax laws. Taxpayers who declare 25 percent less than last year’s taxable income will be closely examined.

Advanced technology, AI to analyse returns

The FBR will use modern data analysis tools, including Artificial Intelligence (AI), to efficiently analyse returns and identify irregularities. This step is part of the board’s broader strategy to modernize tax compliance and increase revenue collection.

Officials emphasized that the system is designed to make audits more precise and faster, targeting large-scale discrepancies while ensuring fairness in enforcement.

Penalties, legal action for non-compliance

Taxpayers whose returns are found inaccurate will face substantial penalties and potential legal action. The FBR has stressed that undeclared or false income will not be tolerated and that all legal measures will be applied against offenders.

The audit plan for 2025 has already been approved, with projections indicating that over 7 million tax returns may be reviewed by November 30. The FBR chairman announced that the goal is to audit up to 80 percent of income tax returns submitted this year.