The federal government has confirmed it will not roll back or amend the expanded tax fraud and arrest provisions introduced under the Finance Act 2025. Minister of State for Finance, Bilal Azhar Kayani, told the Senate Finance Committee that the arrest powers are not new—but they’ve been revised with stronger safeguards to prevent misuse.
One key change: arrests for tax fraud will now require approval from a senior-level FBR committee, rather than from individual Additional Commissioners. Kayani said this oversight should reduce abuse of power and address traders’ concerns. To further ease tensions, the FBR plans to issue a detailed circular explaining the revised arrest procedures and offering clarification on the sales tax rules. A dedicated committee has also been formed to address business community
One key change: arrests for tax fraud will now require approval from a senior-level FBR committee, rather than from individual Additional Commissioners. Kayani said this oversight should reduce abuse of power and address traders’ concerns. To further ease tensions, the FBR plans to issue a detailed circular explaining the revised arrest procedures and offering clarification on the sales tax rules. A dedicated committee has also been formed to address business community
During the session, Karachi Chamber of Commerce and Industry (KCCI) President Muhammad Jawed Bilwani called for the removal of Section 37A(9), which permits arrests based on suspicion. In response, committee members emphasized that future arrests must rely on solid evidence—not assumptions.
Dr. Hamid Ateeq Sarwar, FBR’s Member for Inland Revenue Operations, defended the law, saying changes at this stage would weaken Parliament’s authority. He assured the committee that the circular will make it clear: no arrests will be made without proof, and tax officers who act improperly will be held accountable. A Grievance Redressal Committee is also in place for oversight.
The committee chair concluded that if the FBR’s upcoming clarifications meet stakeholder expectations, there’s no need to revise the law. A representative from the Faisalabad Chamber added that their main concern isn’t the arrest provision itself, but the risk of it being misused by field officers.
