Page 33 - CMA Journal (May-Jun 2026)

F oc us S ec t ion

An initiative dubbed as ‘Operation Greensuit’, which forward in detecting nancial irregularities (Public The OECD (2024) has identi ed ensuring data quality https://www.dailyindependent.com.pk/
(2024,
December
Dawn.
has mobilised a group of nearly 8000 o cers from the Finance.pk, 2026). Data analysis is more than simply and data governance as rst order constraints for PFM • https://www.dawn.com/ 4). Fixing taxation. Dawn.
Inland Revenue and 4000 auditors for discrepancy automated what is there; it is a paradigm shift for AI use. Not to mention, the security concerns • Dawn. (2025, June 29). Traders seek phased introduction of digital
completed AI streamlining in assessing have even
assessment, has been driven by AI tools and digital risk-based auditing in a proactive manner (AGP, 2025; been understood to lower audit threat (KNE invoicing system. Dawn. https://www.dawn.com/
analytics (TechJuice, 2025). Besides, there are some Hum News, 2025). Digital Governance, Data Analytics Publishing, n.d.). The mission's visit to AGP and FBR to • De nePK. (n.d.). Audit Management Information System in Pakistan:
highly visible instances of FBR making use of AI for tax and Risk Based approaches have been introduced from brief them regarding transparency and digitalization • Challenges and Future Road Map. De nePK. https://de ne.pk/
FBR. (2024, November 13). FBR launches new ePayment 2.0 system. Pro t
audit selection including a total of 200 tax audits of the start in training programmes as the Department of indicates the signi cance of external supervision and by Pakistan Today. https://pro t.pakistantoday.com.pk/
companies (PKRevenue, 2025). These are part of its the Auditor General of Pakistan (DAGP) has always abiding by world-class practices (ARY News, 2025). As • FBR. (2025a, September 11). *FBR’s boosts tax-to-GDP ratio to 10.24%,
Introduction introduction of ongoing e orts to link economic activities with tax been an innovative department. The relevance of this Pakistan steps into a future where AI's in uence is enforcement-driven revenue up eightfold*. Pro t by Pakistan Today.
ePayment 2.0 within IRIS ling, and to reach out to tax evaders, under its bigger digital transformation becomes even more salient with increasingly felt in public administration, it is crucial to https://pro t.pakistantoday.com.pk/
Data is the lifeline of good governance, and the use of 2.0 established a level invest in data governance infrastructures, continuous • FBR. (2025b, September 15). FBR Deploys New IRIS Registry Version for
arti cial intelligence (AI) and digital tools within public playing eld for tax data-driven economic linkages with tax ling as well as its impact in achieving its mandate, of safeguarding and comprehensive training of CAs and audit tax Taxpayers. TechJuice. https://www.techjuice.pk/
Ghazi, M. N. (2025, July 15). FBR's Digital Overhaul: Simpli ed Filing, AI
nance are essential factors to consider today. In the payments; enabling tax ling digitization e ort (Pakistan Today, 2025a). The public nances and tranquillising governance authorities, and strengthening of relevant legislation • Audits, and E-Invoicing. LinkedIn. https://www.linkedin.com/
context of the digital transformation drive that is being millions of taxpayers to FBR wants to adopt AI to review 3-5% of all tax lings of processes, while gaining momentum from domestic to ensure AI is used responsibly and legally in public • Hum News. (2025, December 17). FinMin Aurangzeb inaugurates data
followed globally by the public sector, SAIs and make payments easier, the six million returns submitted in total, as compared and international alike — including from the IMF (ARY service. analytics centre to boost audit transparency. HUM News English.
revenue authorities are becoming increasingly at the similar to internet to conventional tax audit mechanisms which are News, 2025) and even the President of India (2026). https://humenglish.com/
ICT.net.pk. (2025, December 3). FBR's Digital Transformation 2025: What It
forefront to maximize the bene ts of AI for banking, ATM or mobile limited to only 24NewsHD (2025). Further, the While these positive developments are commendable, Conclusion • Means. ICT.net.pk. https://ict.net.pk/
transparency, accountability and e ciency (Atayah & banking (FBR, 2024). It is introduction of AI in governance by the cabinet with there are signi cant challenges in implementing AI in The transformation of public-sector tax administration • JISEM. (n.d.). Algorithmic transparency is a prerequisite for responsible AI
Al-Shater, 2021; Bhatt, 2024). Ing. In view of the fact these pioneering digital the approval of the National AI Policy in July 2025, Pakistan's tax and audit processes that need to be and auditing into AI and digital technologies is more adoption in public nance. JISEM. https://jisem-journal.com/
Karakoyun, F. (n.d.). Proactive Approach in Tax Risk Management: Data
that the world is moving towards an Arti cial advancements, working provides a strategic boost towards this trajectory in resolved for sustainable and ethical growth. Digital gap than a mere improvement in technology; it is a shift in • Analysis Techniques to Identify High-Risk Taxpayers. CEEOL.
Intelligence (AI) system, Federal Board of Revenue in tandem, that will addition to the use of AI in tackling several tax issues and lack of digital competency are the main concerns. governance. In conclusion, the AI-driven audit of tax https://www.ceeol.com/
(FBR) and Auditor General of Pakistan (AGP) are the key enable the use of more (The IGC, 2025). Many countries, especially in the developing world like evasion by the FBR and the data analytics center by the • KNE Publishing. (n.d.). AI optimization strategy in taxes can mitigate the
to e ect this change. This Article under sub theme sophisticated analyses Arti cial Intelligence in Public Sector Pakistan lack those experts to implement and operate AGP represent key strides in the direction of a level of tax audit risk. KNE Publishing. https://knepublishing.com/
OECD. (2024). The AI-augmented state: enforcing scal promises. ODI.
"Digital and AI Based Tax and Audit System" (FBR/AGP) incorporating AI. AI powered tax administration platforms and some transparent, accountable and e cient public nancial • https://odi.org/
in the News Letter of CMA Journal addresses various Auditing taxpayers may have di culties with tax compliance in management system in Pakistan. The moment one • Pakistan Today. (2025a, September 10). FBR unveils reform drive to
aspects on how AI may help in improving tax AI for Tax Compliance and Fraud Detection Meanwhile, the concept of digitisation of the auditor the context of digital platforms (Studia UBB - n.d.; goes one level more, from greater adherence to tax modernise tax system, boost compliance. Pro t by Pakistan Today.
rules and regulations, and fraud detection services to
compliance and public sector audit in Pakistan. It The use of arti cial intelligence (AI) technologies like general of Pakistan has been revolutionised. The ATI/OECD 2023). Those gaps are: the IRIS portal was proactive risk-based auditing services, there are https://pro t.pakistantoday.com.pk/
PAAA. (n.d.). Training programs tailored to align with global trends. PAAA.
brings together the latest studies and ndings from machine learning, natural language processing, and highlight among these developments is the Audit frequently experiencing outages and people were considerable bene ts. But, the future journey will need • https://paaa.gov.pk/
academic institutions, worldwide, and the ongoing data analytics, for tax administration is on the rise in Management Information System (AMIS), an apprehensive about the implementation of digital to be traversed with prudence, as there are a number • PhoneWorld. (2025, December 17). Finance Minister Inaugurates
work on the ground in Pakistan, emphasising the the world.AI technologies like machine learning, all-encompassing digital solution that is set to make invoice, especially for small traders, is an a ordable of key challenges to be overcome, including AI-Powered Centre for Government Data Analytics to Boost Transparency.
potential, pitfalls, and purpose of transformation natural language processing, and data analytics are the audit more streamlined and e ective, eliminating solution (Dawn 2025). In addition, AI implementation infrastructure, know-how, data governance and ethics. PhoneWorld. https://www.phoneworld.com.pk/
strategies for the future. Obviously, the technologies explored in this essay • PKRevenue. (2025, October 30). FBR’s AI Audit Detects 200 Corporate Tax
giving tax administrations an opportunity to the need for the cumbersome manual audit process in public sector auditing might be hindered by factors strategic and responsible can change the landscape of Cases. PKRevenue. https://pkrevenue.com/
President of India. (2026, May 14). President Droupadi Murmu says, Audit
Digitalizing Tax Administration in Pakistan streamline, calculate, and simplify tax ling and (TMC, 2024; De nePK, n.d.). The most important of the like resistance to change, high implementation costs the tax world, no less than the books they can turn in • needs to keep up with technological evolution to perform e ectively.
compliance e orts in the world (Bhatt, 2024). The various achievements is the Federal Minister (FM) for and lack of infrastructure. The studies conducted in Pakistan. The road has begun and the next is to make it NewsOnAir. https://www.newsonair.gov.in/
Digitalization of the tax system in Pakistan took a stride introduction of AI solutions has improved tax Finance having opened the Centre for Government Kenya revealed multiple reasons why AI is not yet • Public Finance.pk. (2026, May 10). Public Financial Management Reforms in
forward with the launch of the Integrated Revenue collection and minimized the rate of tax evasion thanks Data Analytics at the AGP headquarters in December widely adopted, most notably, there is still a challenge Inclusive, Transparent and Irreversible. Sindh: Progress and Challenges. Public Finance.pk.
Information System (IRIS), the main online platform for to the use of AI-based tools used in tax risk 2025. It will be an AI-powered centre, shifting the faced when it comes to infrastructures and cost References https://public nance.pk/
Studia UBB. (n.d.). Digital and technical expertise gap in developing
tax ling and compliance (Ghazi, 2025). Since its assessments, tax fraud detection and enforcement paradigm from quantity to quality audit-based and (Su-Plus, 2024). The outcomes of the AGP report have • 24NewsHD. (2025, March 4). FBR to collect another Rs250 billion from • countries. Studia UBB. https://studia.ubbcluj.ro/
inception, the FBR has evolved from paper-based to (Karakoyun, n.d; Attayah & AlShater, 2021). Up to 82% bring in entity and project-based evaluations shown a marked improvement with respect to tax retailers to tackle revenue shortfall. 24NewsHD. https://www.24newshd.tv/ • Su-Plus. (2024, July 8). Assessing factors in uencing adoption of Arti cial
automated systems and has also moved towards cloud easier detection of tax evasion is achieved, audit tax (PhoneWorld, 2025; APP, 2025). The center will also coverage – the number of tax lers showed a 76% • 24th September, 2024 – Supreme Audit Institution Assembly. (2024). CAG Intelligence in audit of public entities in Kenya. Strathmore University.
technology, enabling 100% real-time monitoring of ling time reduced by 50% and there might be notable include machine learning and AI auditing and growth while tax revenue increased by 30%, India. https://cag.gov.in/ https://su-plus.strathmore.edu/
Tax Notes. (2024, November 8). Balancing Innovation and Oversight: Tax
taxes along with data analysis (ICT.net.pk, 2025). tax revenues increases (AI & Big Data Study, 2026). checking of government data, to enhance the audit suggesting that despite the strides made by • AGP. (2025). Tax Filers Surge, Revenue Grows Less. Taxhelplines.com.pk. • Advisers Critical for AI. Tax Notes. https://www.taxnotes.com/
https://taxhelplines.com.pk/
Indeed, it was going to be a transformation of process, Research by tax authorities around the world identi ed e ciency, e ectiveness and transparency (Daily digitalisation, e orts are still required for quality and • APP. (2025, December 17). Finance Minister inaugurates Centre for • TechJuice. (2025, November 12). *FBR Launches AI-Powered Audit of 7
technology, and people, and one important step in that about half of them are already leveraging AI for Independent, 2025). This is in tune with the global best reach of audit in Pakistan (AGP, 2025). Government Data Analytics in AGP. APP. https://www.app.com.pk/ Million Tax Returns*. TechJuice. https://www.techjuice.pk/
that transformation process was the approval of the risk assessment and fraud detection (Tax Notes, 2024). • ARY News. (2025, February 12). IMF mission visits, AGP, FBR, brief on • TechJuice. (2026, January 15). Pakistan Accelerates Digital Transformation
Comprehensive Plan for a transformation from the practice where supreme audit institutions (SAIs) have So also the moral and political hazards are always at transparency, digitalization. ARY News. https://arynews.tv/ • of Public Sector Auditing. TechJuice. https://www.techjuice.pk/
The Hindu Business Line. (2024, September 24). Audit bodies must address
Prime Minister in October 2024 (FBR, 2025a). This trend In line with this, FBR has o cially jumped on the embraced a more liberal use of AI for improving the door. When it comes to using AI in public nance, • Atayah, O. F., & Al-Shater, M. (2021). The Role of Arti cial Intelligence in Tax growing risks of privacy breaches, social exclusion: CAG Murmu. The Hindu
looks set to continue and the achievements of the bandwagon of AI and made a commitment to use AI evidencebased decision-making (CAG India, 2024). In algorithm bias, privacy issues, and social distancing are Fraud Detection. International Journal of Digital Accounting Research, 21, Business Line. https://www.thehindubusinessline.com/
95–129. https://doi.org/10.4192/1577-8517-v21_4
The IGC. (2025, October 20). Harnessing AI, data and technology for
digitalization and enforcement driven revenue for tax enforcement. Previously the FBR used to audit addition, the AGP has converted a number of software issues of concern. • ATI/OECD. (2023, May 25). Last iteration of the ATI & OECD workshop series • growth in Pakistan. The IGC. https://www.theigc.org/
initiatives are seeing tax receipts rising from 8,8 per income tax returns and wealth statements while licences of specialised big data analysis tools, so far The comptroller and auditor general of India (CAG) has on Digitalising tax administrations. Addistaxinitiative.net. • TMC. (2024, December 25). Auditor General of Pakistan (AGP) - Digital
cent of GDP in 2023-24 to 10,24 per cent in 2024-25 currently the FBR is changing the audit methodology looking ahead to operate these in the regular audit commented that public audit bodies need to https://www.addistaxinitiative.net/ Transformations by TMC. TMC. https://www.clients.tmcltd.com/
(FBR, 2025b). With the launch of new version of IRIS from random audits to risk-based audits using Arti cial process as well. proactively handle these risks (The Hindu Business • Bhatt, N. (2024, April 21). The Impact of Arti cial Intelligence on Taxation:
Opportunities, Challenges, and Future Directions. IJALR. https://ijalr.in/
(Taxpayer Registration) enhancements were added to Intelligence (AI). In 2025 FBR also initiated a new and These digital instruments are already having an impact Line, 2024). Algorithmic transparency trumps the • CAG India. (2024, September 24). President of India graces the opening About the Authors: Ms. Mahwish Mehmood is an Inspector at the
the taxpayer registration, user pro le management groundbreaking ‘mass audit' programme involving on the public nances management system. AI-driven responsible use of AI, since it is crucial to understand ceremony of the 16th Asian Organisation of Supreme Audit Institution Inland Revenue Department of the Federal Board of Revenue (FBR),
and recovery activities, making the process easier and over 7 million income tax returns through the use of audit software, in Pakistan, is reported to have the output from a model, and ask questions to the Assembly. PIB. https://www.pib.gov.in/ Pakistan. She holds a Bachelor’s degree (2015) and a Master’s degree
(2018) from Islamia University Bahawalpur, and is currently pursuing
more e cient to use (FBR, 2025c). Furthermore, the Arti cial Intelligence (AI). identi ed billions in irregular spending - a major step automated recommendations (JISEM, n.d.). • Daily Independent. (2025, December 17). Federal Finance Minister a PhD-DBA at INTI International University, Malaysia.
Inaugurates Center for Government Data Analytics. Daily Independent.
ICMA’s Chartered Management Accountant, May-Jun 2026 31