The Federal Board of Revenue (FBR) has proposed mandatory electronic data sharing by all banks and Electronic Money Institutions (EMI) to enable algorithmic cross-matching of tax and banking information to detect tax evasion.
The proposal, introduced under Section 165AB of the Finance Bill FY2026-27, requires every banking company and EMI to upload specified account holder data to a Central Data Hub maintained by the FBR.
The requirement applies despite existing protections under the Banking Companies Ordinance 1962, the State Bank of Pakistan Act 1956, and the Protection of Economic Reforms Act 1992, which are overridden by this provision.
Banks must report account holders whose total deposits or withdrawals exceed Rs100 million during any 6-month reporting period, covering all bank accounts maintained by that individual or entity.
Reported information must include details of deposits and withdrawals, opening and closing balances, peak credits, and total credits recorded across all accounts during the relevant reporting period.
The data will be processed digitally through the Central Data Hub and will not be visible to any Income Tax Authority during the algorithmic cross-matching process, according to the bill.
Where a gross mismatch is detected, the FBR’s digital system will automatically feed the flagged information into its Compliance Risk Management system for further action by the National Faceless Centre.
The FBR has been directed under the bill to ensure that all banking information shared through this mechanism remains strictly confidential and is not disclosed or misused in any circumstances.
The reporting period is defined as 2 six-month cycles per financial year, running from 1 July to 31 December, and from 1 January to 30 June respectively.
Banks must submit data for the first reporting period by 31 January and for the second reporting period by 31 July of each relevant financial year, as prescribed in the bill.
The term peak credits is defined as the highest credit balance held across all accounts of an account holder on any single date during the applicable reporting period.
The Central Data Hub is defined as a virtual repository of data maintained by the FBR through PRAL, Pakistan Revenue Automation Limited, its technology implementation arm.
The Finance Bill also proposes authorising the State Bank of Pakistan to establish and operate a secure centralised virtual repository of banking data using unique identifiers, as prescribed by the FBR Board.
