ISLAMABAD: Pakistan’s tax authorities have identified millions of potential tax evaders through an innovative use of technology and a “Lifestyle Monitoring Cell” that is designed to track online activities and spending patterns of high-net-worth individuals, including social media influencers and businesspeople, officials said on Tuesday, in a bid to detect tax evasion and undeclared incomes.
In a first-of-its-kind move, Pakistan’s Federal Board of Revenue (FBR) has set up the dedicated cell to monitor social media activities of influencers, celebrities, businesspersons and professionals whose lavish lifestyles may not match their declared income or tax records.
The Lifestyle Monitoring Cell, operating under the FBR’s Intelligence and Investigation Wing, gathers data from platforms such as Instagram, TikTok, X, Facebook, YouTube, and LinkedIn to identify individuals who flaunt substantial wealth online but remain outside the tax net or underreport income.
Speaking to Arab News, Hamid Attique Sarwar, an FBR’s Inland Revenue Operations official, said they have identified around 4 million potential tax evaders through the newly formed monitoring cell and other methods, such as physical surveys and mainstream media monitoring.
“Out of these 4 million, a ten percent sample — around 0.4 million people — has been shortlisted, and they are now the focus of our attention,” Sarwar said.
According to a notification issued by the Directorate General of Intelligence and Investigation–Inland Revenue last month, the cell has been empowered to analyze social media data, estimate hidden income and initiate investigations under the country’s tax and anti-money laundering laws.
The specialized unit builds digital profiles, cross-checks them with the national tax database, and prepares evidence-based reports for possible investigation under tax and anti-money laundering laws.
The South Asian country has one of the lowest tax-to-GDP ratios in the region, despite a population of more than 240 million, and has often failed to meet its tax collection targets.
In June, Prime Minister Shehbaz Sharif’s government set a record-high tax collection target of Rs14.13 trillion ($47.4 billion) for the fiscal year 2025–26, marking a 9 percent increase from the previous year. Officials say meeting this goal is essential to reducing reliance on external debt and ensuring long-term fiscal sustainability.
Sarwar said the latest crackdown is aimed at improving tax compliance and widening Pakistan’s narrow tax base.
“Our purpose is not to catch people but to improve things in Pakistan when it comes to tax collection,” he said. “We want everyone to pay tax so that we reduce the burden on the salaried class, which is heavily taxed.”
In the first quarter of FY2025-26, salaried individuals paid Rs130 billion ($462 million) in income tax, surpassing the combined tax contributions of retailers, wholesalers, and exporters, according to the FBR data.
This year, Sarwar said, the FBR has warned through emails and text messages around 8 million people whose lifestyles did not match their tax profiles.
“The purpose of nudging these people was to make them pay more taxes as per their income,” the official said. “We told them that FBR has an eye on them so that they voluntarily stop tax evasion.”
There are individuals who own fleets of luxury cars, travel frequently around the globe and live in luxury houses but pay very little tax, according to the FBR. One such individual owned a Rs4 billion ($14.14 million) house, with millions of dollars worth of cars and farmhouses, but declared a monthly income of only $1,414.
Last year, Sarwar said, the FBR collected around Rs800 billion ($2.8 billion) through such measures.
“We collected 60 percent more tax from sugar mills alone last year,” he added.
The FBR also collects this data from Pakistan’s National Database and Registration Authority (NADRA) and other government agencies. The revenue watchdog needs to collect Rs45 billion ($159 million) per day to meet its annual tax collection target, according to the official.
The revenue watchdog is also probing the income of the country’s top singers, fashion designers and artists, sources told Arab News.
“We do not hate rich people. Our purpose is that they should pay more taxes,” Sarwar said. “We have around 25 field teams to track high-net-worth individuals and we also use the latest software to find such people.”