FBR officers on performance watch

About 40% officers of the Federal Board of Revenue (FBR) considered for promotion have been placed on the performance watch list due to their competency and integrity issues while suspension cases have tripled over the past two years, said the tax authorities.

In a background briefing, the tax authorities said that financial integrity was a main factor in promotions. According to the statistics shared by the FBR, the ratio of officers placed on the performance watch list rose sharply between 2023 and 2025. It increased from about 2% in 2023 to about 40% in 2025.

They attributed the jump to a host of measures introduced by FBR Chairman Rashid Langrial after assuming office two years ago. The authorities said that because of those measures and the additional scrutiny, the share of officers with low integrity ratings given on the basis of internal assessments, in the critical Inland Revenue positions fell from 74% in July 2023 to 11% by June 2026.

They claimed that 89% of those posts "are now being held by high-rated officers". In the Customs, the share of low-rated officers in critical posts fell from 71% in January 2023 to 9% in June 2026. FBR officials noted that the decline continued and intensified since the current FBR chairman took the reins in August 2024, they added.

Nepotism culture is also being discouraged and the authorities claimed that not even a single officer had been posted on the recommendation of some politician or bureaucrat and all such postings were made on the basis of professional qualification, integrity and competency.

Since August 2024, the tax authority has carried out one of the most sustained self-accountability drives in its recent history, said the authorities. FBR figures showed that disciplinary proceedings resulting in major penalties against the staff had nearly doubled, rising from 38 cases in FY 2023-24 to 75 cases in FY 2025-26.

They said that suspensions of Inland Revenue Service (IRS) and Customs officers in grades BS-16 to BS-21 followed a similar trend, climbing from 33 in FY24 to 105 in FY26, roughly triple the pre-reform baseline.

The FBR has remained under scrutiny of various quarters and the Federal Tax Ombudsman (FTO) has also issued judgements in recent days, pointing to administrative, operational and policy flaws.

During the background briefing, the tax authorities said that as of April 2026, 32 officers were found to have questionable reputation – 14 from the IRS and 18 from Customs – and the large majority of them having BS-20 and above grades, have been sidelined and denied postings.

However, questions have also been raised about the process that has to be followed to sideline any officer whose financial integrity is disputed. The FBR has struggled in the past to collect irrefutable evidence against such officers that can withstand the scrutiny of courts.

But the tax authorities said that utmost care was being taken to make sure that no officer was unduly penalised and every senior posting "is now subject to a vetting standard introduced in the past two years".

For the first time, a system-based performance management mechanism has been adopted, with forced peer reviews reaching 100% completion across its last three evaluation cycles. This has provided a more reliable mechanism to judge the integrity and professional competence of FBR's officers and decide their postings, promotions and rewards, said the tax authorities. The figures pointed to the most consequential accountability push that the FBR had undertaken in years, they added.

Tax ombudsman

Meanwhile, the FTO identified a systemic flaw in the FBR's FASTER sales tax refund system and on Friday directed the tax authority to take immediate corrective measures. FTO Zafar Hijazi warned that the defect was adversely affecting exporters and undermining the automated refund mechanism.

In an order issued on complaints filed by Karachi-based exporter Quality Towellers, Hijazi observed that the FASTER system was unable to differentiate between the Goods Declaration (GD) for commercial export and the GD for non-commercial sample export. This results in the system incorrectly raising the objection "GD Not Realised" and diverting the taxpayer's entire carry-forward refund claim to manual processing instead of deferring only the proportionate amount as required under STGO No 09 of 2023 and the Sales Tax Act, 1990.

The ombudsman noted that the exporters sending product samples through courier services were particularly affected because such consignments did not require the realisation of export proceeds and were not eligible for sales tax refunds. However, these declarations are automatically populated in the IRIS sales tax return and cannot effectively be removed, causing unnecessary objections during refund processing.

During the proceedings, Pakistan Revenue Automation Limited (PRAL) informed the FTO that it was only receiving the export GD data from Pakistan Customs through an automated interface and had no legal or technical authority to alter or correct the information. It stressed that any amendment to the GD must be made by Pakistan Customs, after which the corrected data would automatically flow into the IRIS system. The FTO termed the issue a "systemic and hazardous loophole", posing a threat to the export sector and directed the FBR's Inland Revenue and Customs wings to jointly resolve the matter.