The National Assembly’s Standing Committee on Finance has rejected a proposal that would have allowed the Federal Board of Revenue (FBR) to share taxpayers’ personal financial data with commercial banks for compliance monitoring and data matching purposes.
The committee, chaired by Syed Naveed Qamar, raised serious concerns over the sensitivity of taxpayer information and the potential risks of misuse. Lawmakers also questioned whether the proposal aligned with the government’s planned faceless tax system, which aims to reduce direct human interaction in tax enforcement.
According to the rejected plan, banks would have been tasked with comparing customer financial data against algorithms provided by the FBR. Any discrepancies identified would then be reported back to tax authorities for further action. However, committee members argued that such a mechanism could expose citizens to unnecessary scrutiny and increase the risk of harassment.
Instead of involving commercial banks, the committee approved a more limited arrangement allowing taxpayer data to be shared only with the State Bank of Pakistan. This step is intended to support the development of a centralized data repository while maintaining stricter controls over sensitive financial information.
Lawmakers emphasized the importance of protecting taxpayer privacy while also improving the efficiency of revenue collection. The debate reflects ongoing tensions between strengthening tax compliance systems and safeguarding citizens’ financial confidentiality in an increasingly digitized governance framework.
In a separate development during the same meeting, committee members called for a review of income tax exemptions granted to selected organizations, including certain institutions linked to the armed forces and charitable entities. Lawmakers argued that preferential tax treatments should be reassessed to ensure fairness and transparency across all sectors.
The committee also approved a proposal to double the minimum income tax rate on capital gains from the disposal of securities for non-filers, a move aimed at widening the tax net and discouraging tax evasion.
Officials believe these measures reflect broader efforts to modernize Pakistan’s taxation system while balancing enforcement with taxpayer rights. The discussions underscore the government’s ongoing attempt to improve revenue collection mechanisms without compromising data security and public trust.
