Newly appointed Federal Board of Revenue (FBR) chairman Shabbar Zaidi on Friday devised a mechanism to freeze bank accounts in case of a dispute, directing authorities against freezing accounts without his prior approval and notice to the account holder.

In what was his first order in the capacity of the FBR chairman, Zaidi directed all chief commissioners inland revenue to inform the account holders 24 hours prior to freezing their accounts if they must do so.

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"No bank account attachment unless the taxpayer's chief executive officer or principal officer or owner is informed at least 24 hours prior to attachment and the chairman FBR's approval is obtained," read the board's notification.

Talking to reporters today, Zaidi explained that there is already a provision for freezing of a bank account as the last recourse in case of a dispute between the account holder and institutions.

"My intention and aim is to document the undocumented economy," he said, answering a question regarding tax reforms.

"The documentation of the undocumented economy will automatically increase the tax base."

"No one can estimate the [volume of] parallel economy. Some people say it amounts to 30 per cent of the economy, some say it is 40pc, my opinion is that it would be more than 30pc."

Earlier in the day, Zaidi addressed officers of the FBR soon after taking charge. The chairman shared his vision to revamp the tax system and machinery and discussed broader problem areas affecting the institution, according to a press release.

Zaidi during the meeting stressed the need to shift from manual to a completely automated system to facilitate taxpayers.

He took the FBR officers into confidence and assured them that the issues being faced by the FBR employees would be addressed under his leadership. He sought the support of all the officers to work as a team for the betterment of the institution and the country.

Zaidi, a private sector tax expert, is a Karachi-based partner in the chartered accounting firm A.F. Ferguson. The establishment division notified him as the new FBR chairman on an honorary basis on Thursday, amid strong opposition from top tax officers.

He has become the third person from the private sector to hold the post. The announcement for his appointment had come from the prime minister during a briefing with senior journalists on the proposed local government system in Punjab.

As a senior chartered accountant dealing with some of the largest business enterprises in the country for decades, Zaidi brings with him a wealth of experience and knowledge about the tricks of the trade that are commonly used for tax evasion.