Pakistan cracks down on tax fraud with hefty fines, jail time in new budget

Pakistan government has introduced stringent measures in the 2025-26 budget to crack down on tax evasion and the misuse of National Tax Numbers (NTNs), officials said Tuesday.

Federal Board of Revenue (FBR) has proposed granting sweeping powers to the Intelligence and Investigation Inland Revenue (IR) to pursue offenders. Under the new measures, individuals found guilty of knowingly using false NTNs or Computerized National Identity Card (CNIC) numbers on tax returns or other official documents will face severe penalties.

Those convicted could be fined up to 500,000 Pakistani rupees ($1,800) and imprisoned for up to three years.

The proposed amendment states that if a false NTN or CNIC is discovered during proceedings, investigations or audits under Section 230(2)(a) of the Income Tax Ordinance, the offender will be subject to the full penalty.

The move aims to strengthen tax compliance and deter fraud as part of the government’s broader fiscal reforms.