In a bold attempt to confront Pakistan’s entrenched culture of tax evasion, the Federal Board of Revenue (FBR) is preparing to roll out record-breaking incentives for whistleblowers, potentially transforming them into key allies in the crackdown on undeclared wealth. The proposed reforms are aimed at encouraging individuals with inside knowledge of hidden assets to come forward, providing the tax authority with much-needed intelligence on one of the country’s most persistent economic challenges.
According to senior officials familiar with the development, new rules are being finalized that would significantly expand the current rewards framework, multiplying payouts many times over. At present, whistleblowers can receive a maximum of Rs5 million for information on tax dodgers. However, the latest proposal seeks to raise the cap dramatically, allowing payouts as high as Rs150 million depending on the quality and impact of the intelligence shared. Officials believe that such unprecedented incentives could be the breakthrough needed to penetrate the wall of secrecy surrounding untaxed wealth.
The proposal was initiated by the Chief Commissioner of Inland Revenue at the Regional Tax Office (RTO) in Islamabad, who recently sent a detailed letter to the Member IR Operations, pressing for urgent reform. In the communication, the commissioner argued that lavish lifestyles — characterized by luxury vehicles, international travel, branded clothing, and designer accessories — often bear little resemblance to the incomes declared in tax filings. This mismatch, the report stressed, underscores the critical need for a robust whistleblowing framework to close the gap between declared and actual wealth.
Beyond financial incentives, the success of the plan hinges on strict confidentiality. The RTO emphasized that secrecy must be absolute and safeguarded by law, noting that violations of whistleblower anonymity should be punishable under Section 216 of the Income Tax Ordinance, 2001. Without guaranteed protection, potential informants may be reluctant to risk exposure despite the lure of large rewards.
The plan also reflects a strategic shift in enforcement philosophy, drawing lessons from advanced economies where whistleblowing programs have been instrumental in unearthing hidden assets. Relatives, employees, drivers, domestic staff, and even neighbors are often privy to spending habits that reveal a taxpayer’s true financial standing. By formally incentivizing these insiders, the FBR hopes to convert private observations into actionable intelligence.
The initiative comes at a critical time, with the September 30, 2025 tax filing deadline fast approaching. Officials argue that launching the program now and restricting it initially to the current tax year could encourage greater voluntary compliance, as taxpayers may choose to declare wealth proactively rather than risk exposure through whistleblowers.
If approved, the policy could reshape Pakistan’s approach to revenue collection by turning social envy into a structured national cause. By combining confidentiality guarantees with unprecedented financial incentives, the FBR aims not only to deter tax evasion but also to empower citizens to play a direct role in strengthening the tax system.
The success of this initiative will depend on careful implementation, but if executed effectively, it could mark a turning point in Pakistan’s efforts to combat its vast shadow economy and broaden the tax base.
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