DG of Intelligence & Investigation IR: FBR empowers Director to approve inquiry initiation against businessmen involved in tax fraud

ISLAMABAD: The Federal Board of Revenue (FBR) has empowered the Director of the Directorate General of Intelligence & Investigation Inland Revenue to approve the initiation of an inquiry against businessmen involved in tax fraud.

This is subject to the condition of prior approval of the FBR Member, Inland Revenue (Operations) of the Board. The FBR has amended the Sales Tax General Order (STGO) 2 of 2025 through a notification issued on Tuesday.

Director of Intelligence & Investigation (Inland Revenue) has been added to the notification along with the Commissioner of Inland Revenue for inquiry/investigation against the businessmen.

According to the revised STGO, the inquiry shall not be initiated unless it is approved by the Commissioner or the Director of Intelligence & Investigation (Inland Revenue).

After the conclusion of the inquiry, the Commissioner or Director of Intelligence & Investigation (Inland Revenue) shall not approve to initiate the investigations unless he has obtained approval from the FBR Member IR (Operations).

Before seeking approval, the FBR Member IR (Operations), it is binding upon the Commissioner or the Director of Intelligence & Investigation (Inland Revenue) to consult with two representatives of the business community from amongst such representatives as notified by the Board, the revised procedure said.

According to earlier sales tax circular number 02 of 2025-26, a new sub-section (4) of Section 37 was inserted in the Sales Tax Act to empower the officer of Inland Revenue to exercise the powers of a civil court under the Code of Civil Procedure, 1908.

Power to inquire and investigate sales tax frauds and procedure for arrest: Through the Finance Act, 2025, powers and procedure of inquiry and investigation in cases of sales tax fraud and other offences warranting prosecution under the Sales Tax Act have been streamlined. Under the new framework, the Officer of Inland Revenue can initiate an inquiry only after obtaining the approval of the Commissioner based on the material evidence pointing to the commission of tax fraud or other offence warranting prosecution.

Copyright Business Recorder, 2026