ISLAMABAD: The Federal Board of Revenue has established the National Faceless Centre (NFC) in Islamabad as part of a major reform of the tax system, with its faceless audit and assessment wings scheduled to begin operations in October.
Initially staffed with 27 officers, the centre will audit and assess third-party data involving an estimated 300,000 to 400,000 individuals under a pilot project. The data will be provided to the NFC in phases after initial compliance checks are completed.
The NFC will initially handle individual and medium-sized cases, while corporate entities and associations of persons will remain outside its scope.
The second phase of the system is scheduled to begin in June 2027, when audit and assessment functions of all regional tax offices will be centralised.
The Board in Council, headed by FBR Chairman Rashid Mahmood Langrial, approved the NFC operating rules Friday, with the new system set to take effect Oct. 1. The centre has been established at the premises of the Regional Tax Office Islamabad.
The initiative is part of Pakistan’s New Tax Operating Model, which the government approved in principle in June.
Focus on high-value purchases
A senior tax official said the NFC would initially focus on third-party information related to air travel, luxury vehicle purchases and expensive residential properties.
Under the system, individuals will receive notices asking them to explain or provide proof for high-value expenditures.
If taxpayers can justify the spending, their cases will be dropped. Those unable to provide satisfactory justification will be required to pay applicable taxes and revise their returns. The system will also include a digital, artificial intelligence-based option for tax payments.
The faceless tax model is similar to systems used in countries including the United Kingdom, Australia, the Netherlands, Singapore and India. It is designed to eliminate direct physical interaction between taxpayers and tax officials and reduce opportunities for corruption.
According to the FBR, taxpayers whose returns were previously selected for audit had to deal with a specific tax officer, often in person. Under the new system, that direct contact will end.
Cases will be selected through a computerized, risk-based system rather than by individual officers. Each case will then be automatically assigned to an officer located anywhere in the country.
The taxpayer will not know the identity of the officer handling the case, while the officer will have no role in selecting the case.
The FBR said each case would pass through three separate officers. One officer will conduct the audit, another will make the assessment, and a third will review the work before an order is issued.
This process is intended to ensure that no single officer controls a taxpayer’s case from start to finish.
