The Federal Board of Revenue (FBR) has introduced sweeping new powers for Inland Revenue officers under the Finance Bill 2025-26, allowing them to arrest company executives and others involved in tax fraud.
These powers permit National Revenue officers to arrest directors, CEOs, CFOs, and anyone believed to have committed or helped in committing tax fraud, if there’s credible evidence, after getting approval from the Commissioner.
However, in urgent cases where there’s a risk the accused might avoid legal action, officers can arrest without previous approval but must report the arrest and its reasons to the Commissioner immediately.
If the Commissioner finds the arrest unjustified or believes it was done in bad faith, the officer will be ordered to release the person, and the case will be referred to the Chief Commissioner for a detailed inquiry.
The law specifies that if a company is suspected of fraud, individuals in senior roles can be arrested if they are believed to be personally involved, though such arrests won’t clear the company of its tax dues or penalties.
All arrests will follow the procedures laid out in the Code of Criminal Procedure, 1898, unless stated otherwise in the Act.
Officers not below the rank of Assistant Commissioner, if authorized, may also arrest individuals who helped commit tax fraud, but only with the Commissioner’s approval for both the investigation and arrest.