FBR given powers to question taxpayers about their wealth

The Federal Board of Revenue (FBR) has been given the power to require taxpayers to provide detailed wealth statements for Tax Year 2027, covering the financial year from 1 July 2026 to 30 June 2027.
The power is provided under Section 116 of the Income Tax Ordinance, 2001, which allows a tax commissioner to issue a written notice requiring an individual to submit a wealth statement in the prescribed form and within a specified deadline.
The statement can include details of a taxpayer’s assets and liabilities, including those held outside Pakistan.
The FBR can also seek information about the assets and liabilities of a taxpayer’s spouse, minor children and other dependants. However, a spouse’s assets are required to be included only where the spouse is financially dependent on the taxpayer.
Tax authorities may also ask taxpayers to provide details of assets, including foreign assets, that were transferred to another person during the period specified in the notice, as well as the consideration received for those transfers.
Details of expenditures incurred by taxpayers, their spouses, minor children and dependants may also be requested.
Under Section 116, resident individuals who are required to file an income tax return must submit a wealth statement and wealth reconciliation statement alongside their tax return.
Members of an association of persons are similarly required to submit the statements with the association’s income tax return.
Taxpayers who discover an omission or incorrect information in their wealth statement can submit a revised statement and wealth reconciliation statement, together with reasons for the changes.
However, a revision must be made before the taxpayer receives a notice under Section 122(9) of the Income Tax Ordinance.
The commissioner can declare a revised statement void if it is found that the changes were not made to correct a genuine omission or error. The taxpayer must first be given an opportunity to explain the revision.
The law also places a time limit on revisions. A wealth statement cannot be revised after five years from the due date for filing the income tax return for the relevant tax year.
The provisions give the FBR a legal mechanism to obtain detailed information about taxpayers’ assets, liabilities and expenditure, both within Pakistan and abroad, as part of the wealth declaration and reconciliation process for Tax Year 2027.