FBR Granted Arrest Powers for Tax Fraud in Budget 2025–26

In a significant move under the **2025–26 Budget Bill**, the **Federal Board of Revenue (FBR)** has been granted **enhanced powers** to combat tax fraud. Inland Revenue (IR) officers now have the **legal authority to arrest** individuals involved in tax-related crimes, including **company directors, CEOs, CFOs**, and any other aiding persons.

According to media reports, arrests can only be made if:

* **Evidence of criminal activity** is found during investigations, and
* **Prior approval** is obtained from the **Commissioner Inland Revenue**.

However, in urgent cases — such as when there’s a **risk of the accused fleeing** or **tampering with evidence** — officers may arrest without prior approval. In such instances, they are required to **immediately report all details** to the Commissioner.

The **Commissioner** retains the right to **order the release** of any individual if the arrest is found to be **baseless or made in bad faith**. Such cases may also be referred to the **Chief Commissioner for further inquiry**.

The law applies to companies as well. If a company’s top officials are found **directly involved** in tax fraud, they can be **detained individually** — though **tax liabilities, penalties, and charges** against the company will remain intact regardless of individual arrests.

All arrests under this new provision will follow the procedures outlined in the **Code of Criminal Procedure, 1898**, unless otherwise specified by the new budget law.

Additionally, only officers of the **Assistant Commissioner level or above** will be authorized to execute arrests related to tax fraud cases, provided they have **official clearance from the Commissioner**.

This expansion of FBR’s authority is seen as a **tougher stance** against tax evasion and is expected to bring **greater accountability** within corporate financial practices.