FBR’s Entire IT System Collapses, Falls Under Control of Cybercriminals – FTO

The Federal Tax Ombudsman (FTO) has made a shocking revelation that the FBR’s entire IT system has collapsed and is currently under the control of cybercriminals.

According to the FTO’s order, hackers can manipulate the FBR’s IT system freely, with no security mechanism in place to stop or trace them.

The case was filed under Section 10(1) of the Federal Tax Ombudsman Ordinance, 2000, initially concerning the illegal suspension of a taxpayer’s Sales Tax Registration (STRN). Later, more complaints were added, including frequent hacking incidents, unauthorized access to login credentials, deletion of original invoices, and insertion of fake sales tax invoices.

FBR’s Entire IT System Collapses, Falls Under Control of Cybercriminals – FTO

The FTO’s report stated that the FBR’s system has serious security vulnerabilities, making it open to data manipulation, backdoor access, and unauthorized transactions. The order stated that cybercriminals freely exploit the system without fear of being caught because the entire IT structure has collapsed. These are, according to the FTO, critical issues that must be resolved immediately for the survival of FBR’s IT framework.

The order also revealed that despite the complainant’s consistent efforts to change their ID and password every month, unauthorized access continued, including during the latest tax period of July 2025. The FTO noted that the involvement of insiders with direct system access, particularly from PRAL (Pakistan Revenue Automation Limited), cannot be ruled out.

The repeated hacking of the same taxpayer’s credentials reflects the poor data security and weak integrity of the FBR’s entire IT infrastructure. The report highlighted major weaknesses in data protection, internal controls, and safeguards against tax fraud.

According to the findings, inadequate system checks allow data manipulation, absence of alerts for suspicious activity, weak HS code matching between input and output tax, and unauthorized profile changes — all of which make it easy to create fake transactions.

See Also: FBR Set to Launch IRIS 3.0 – A Major Step Toward Digital Tax Reform

The FTO’s report also suggested possible collusion between taxpayers and FBR/PRAL employees to exploit system loopholes for personal gain.

The FTO warned that these are severe system flaws that could have far-reaching consequences if left unresolved. Immediate action needed to secure the FBR’s digital infrastructure and restore the integrity of its tax management systems.

This situation not only undermines taxpayers’ trust but also poses a serious threat to the transparency and credibility of Pakistan’s revenue collection system.

The report concludes with a recommendation for the government to take urgent measures to enhance data security, strengthen internal controls, and ensure greater transparency within the FBR’s IT framework before the damage becomes irreversible.