The Federal Board of Revenue has introduced an electronic process for scrutinising sales-tax returns and identifying discrepancies through its IRIS system. SRO 1655(I)/2026, issued on 25 September, adds a new chapter to the Sales Tax Rules. It allows IRIS to send electronic advice or advance intimation so a registered person can examine a flagged issue before the matter moves to proceedings under the law.
The rule is intended to make the initial review digital and traceable. It does not mean that every mismatch automatically becomes a tax demand, nor does an advance notice waive FBR’s powers under the Sales Tax Act. The department’s published SRO sets the procedure; the facts in each return and the taxpayer’s response still matter.
How IRIS scrutiny is expected to work
The new Chapter XII-A provides for automated scrutiny and computerised cross-matching of a return with relevant information. Where the system flags a discrepancy, IRIS may issue an electronic advance intimation to the registered person. The taxpayer can review the underlying entries, submit an explanation or correct the return where an error has been found.
The rules provide a response period of at least seven days. If no response is received, a reminder can allow at least a further seven days. An Inland Revenue officer then examines the reply and decides what action, if any, is warranted under the applicable law. The electronic record is retained in the system and the process is to be implemented through the prescribed computerised risk framework.
What registered businesses should do now
Businesses should treat an IRIS message as a prompt to reconcile records, not as a notice to ignore or an automatic finding of liability. Finance teams can compare sales invoices, purchase claims, withholding records and the figures in the filed return before the next filing cycle. A documented explanation is useful when timing, classification or counterparty data explains a difference.
Taxpayers should also check that IRIS contact details and authorised access remain current, route portal notices to someone responsible for tax compliance, and note the response deadline shown in each case. If an amendment is needed, keep the supporting invoices and working papers with the corrected figures. These are prudent controls for responding to the procedure; the SRO does not require every business to use a particular accounting product.
Why the change matters for tax administration
Electronic matching can help FBR prioritise cases where declarations do not align with available transaction data, while giving a business an opportunity to explain an apparent gap before formal action. For firms, earlier visibility may reduce surprises during later correspondence, provided notices are monitored and records are accurate.
The practical test will be whether the system identifies meaningful inconsistencies and gives taxpayers enough detail to respond. Businesses should watch how IRIS describes each mismatch, how officers consider replies and whether the new process changes the time needed to resolve routine differences. PakFiscal’s Federal revenue coverage tracks tax-administration changes alongside the revenue outlook.
The SRO creates a review channel; it is not a blanket clearance for an unchanged return. A taxpayer should still meet filing and payment obligations and obtain professional advice for a case-specific dispute.
