Islamabad: The Federal Board of Revenue (FBR) has blocked more than PKR 6 billion in tax refunds claimed by businesses that failed to comply with mandatory digital monitoring requirements, marking the first major enforcement action under the Finance Act 2026.
According to a report by Business Recorder, citing industry sources, the tax authority has begun implementing expanded enforcement powers introduced through the Finance Act 2026, which require specified industries to adopt digital production monitoring systems, including video surveillance and video analytics at business premises.
In the first phase of enforcement, the FBR withheld refunds of businesses that had not installed production monitoring systems or met other prescribed digital compliance requirements.
The tax authority plans to expand enforcement measures in the next phase. Proposed actions include suspension of sales tax registrations, restrictions on imports, sealing of business premises and confiscation of finished goods.
Businesses that continue to resist installation of production monitoring systems by July 31, 2026, may also face penalties, blacklisting, suspension of sales tax registration and restrictions on the removal of goods from production facilities.
The FBR has already implemented production monitoring systems in the tobacco, cement, sugar, fertiliser and tiles sectors. Installation is currently underway in the iron and steel, packaged milk, beverages and textile industries.
Alongside stricter enforcement, the FBR has accelerated the processing of legitimate tax refunds. The authority disbursed PKR 43 billion in refunds during June 2026 and nearly PKR 600 billion during the 2025-26 fiscal year.
Industry sources said non-compliant importers may also be removed from the customs green channel, while additional penalties could include suspension of sales tax registration and import-related restrictions as the FBR strengthens digital oversight of the tax system.
Samra Zulfiqar, a real estate analyst at Zameen.com, is passionate about finding projects that offer buyers the best returns. Her keen insights spotlight the market’s most promising opportunities.
