FBR stops refunds worth Rs6 billion for those who fail to take digital measures

The Federal Board of Revenue (FBR) has taken strict action against taxpayers who have not implemented digital measures and has stopped refunds worth over Rs 6 billion from non-compliant units.

According to sources, this is the first major action against entities that have not implemented the digital system implemented since July 2026, and especially production monitoring at business locations, under which payment of refunds has been suspended.

Sources said that under the Finance Act 2026, the FBR has been given extensive powers to ensure the implementation of digital reforms, on the basis of which the agency is taking strict legal action against the resisting units.

It was further informed that in this regard, the FBR has decided to fully implement other digital measures, including the installation of video monitoring systems or video analytics in specific sectors, while stricter action is also expected against entities that do not comply with the instructions.

Sources said that in the first phase, refunds worth over Rs 6 billion have been stopped for industrial units that have not implemented production monitoring and other digital measures, an action taken against those institutions that have been reluctant to adopt the prescribed digital system.

Sources said that in the second phase, the registration of such non-compliant units will be suspended, imports will be banned, business centers will be sealed and finished products may also be confiscated.

Sources said that by July 31, 2026, those units and factories that continue to refuse to install production monitoring systems at their business locations will have to face more stringent action.

According to sources, measures such as import ban, fines, sealing of business centers, suspension of sales tax registration, blacklisting and stopping clearance of products from production locations will be taken against units that avoid implementing digital measures.

In this regard, sources said that digital measures have been implemented in the tobacco, cement, sugar, fertilizer and tiles sectors where production monitoring systems have been installed at most locations, while the process of installing production monitoring systems is also underway in the iron and steel, packaged milk, beverages and textile sectors.

Sources said that the FBR, adopting a policy of incentive and strictness in this regard, issued refunds of Rs 43 billion in June 2026, while refunds of about Rs 600 billion were paid from July to June during the financial year 2025-26.

Sources further said that on the other hand, those units that failed to implement digital measures will also have to face measures such as fines, suspension of sales tax registration and deprivation of the green channel facility to non-compliant importers at the import stage.