‘Faceless’ system to modernise sales tax enforcement: expert

ISLAMABAD: The Federal Government has proposed the introduction of a faceless Audit, Assessment and Appeal system under the Sales Tax Act through the Finance Bill 2026, marking another significant step towards digitising Pakistan’s tax administration.

Earlier this year, the government introduced a faceless Customs Clearance System. Building on that initiative, the new proposal aims to modernise sales tax enforcement and adjudication processes by reducing direct interaction between taxpayers and tax officials.

Talking to Business Recorder, leading sales tax expert Arshad Shehzad said that the government has taken a progressive step by introducing the faceless audit, assessment and appeal framework. He noted that similar systems have been successfully implemented in India and are now being adopted in Pakistan to enhance transparency, leverage technology, and minimise discretionary powers within the tax administration.

Under the proposed system, notices and responses will be exchanged electronically through the tax portal, while cases will be allocated automatically to designated officers. In most instances, taxpayers will not be aware of the identity of the assessing officer, a measure intended to ensure impartiality and reduce personal interaction.

Shehzad observed that the initiative is expected to strengthen taxpayer confidence in the system and improve transparency in tax administration. However, he emphasised that the government must closely monitor and effectively administer the new mechanism during its initial implementation phase to ensure fair, efficient, and equitable enforcement.

The intent behind the reform is commendable and it has the potential to improve confidence in the tax system. Nevertheless, careful oversight will be essential to ensure its proper implementation, Shehzad concluded.

Copyright Business Recorder, 2026