A Senate subcommittee on Monday came down hard on the Federal Board of Revenue (FBR), with its chairman, Senator Saifullah Abro, accusing the tax authority of siding with those involved in corruption and warning that fines and money-laundering cases would follow. Abro went further, alleging that the finance minister himself was unaware of what was happening within his own ministry.
The outburst came as the Senate Sub-Committee on Interior and Anti-Narcotics raised concerns over alleged tax evasion and misuse of tax exemptions for the former Federally Administered Tribal Areas (FATA) and Provincially Administered Tribal Areas (PATA), questioning the FBR’s handling of records and the recovery of outstanding dues.
The committee reviewed delays in recovering an estimated Rs800 billion in tax dues and ongoing investigations into imported goods and consumption certificates. Abro criticised the FBR for failing to recover substantial amounts and demanded complete records, warning that negligence in protecting public funds would not be tolerated.
The committee was informed that imported goods worth approximately Rs1,120 billion under the FATA/PATA tax exemption scheme were under scrutiny. Records and consumption certificates covering goods worth around Rs389 billion had been identified, while questions remained about the remaining imports and potential tax liabilities.
Senate Panel Questions Missing Import Records
Officials told the committee that 223 consumption certificates had been issued to 108 companies. The panel questioned why complete details of imports, goods utilization, production and tax payments were not available.
Abro also sought documentary evidence concerning approximately Rs85 billion and questioned whether legal requirements had been fulfilled before goods were released against consumption certificates.
Under the prescribed procedure, companies were required to deposit an amount or pay order equivalent to the value of imported goods with customs authorities before the goods were released to factories. They were also required to submit utility bills, bank statements, business records and employee details to obtain consumption certificates under the relevant SRO issued in 2021.
The committee directed the FBR to provide consumption certificates and complete records for 20 major companies previously identified. It also sought correspondence concerning companies under scrutiny, explanations for cases in which no objections were raised, and details of document verification within two days.
FBR Issues Notices to 512 Companies
The FBR representative told the committee that the law provides for document verification and that companies suspected of fraud could be selected for audit. Findings and recoverable tax liabilities would be pursued under the law.
The committee was informed that notices had been issued to 512 companies. Some submitted complete records, while others provided partial documentation. Letters sent to 58 companies were returned or refused, 35 writ petitions were filed before the Peshawar High Court, and 174 beneficiary companies approached the court seeking relief against the inquiry.
Abro expressed concern that missing records and litigation could obstruct investigations. He directed authorities to compile details of the companies, their owners, business activities, notices and pending cases, and called on the FBR to defend its position in court with complete evidence.
Potential Tax Liabilities Put at Rs400–500 Billion
The committee discussed potential tax liabilities and penalties estimated at Rs400 billion to Rs500 billion. However, the actual recoverable amount remains subject to formal verification of records and legal scrutiny.
The panel also reviewed the FIA’s investigation into imported goods, consumption certificates, company activities and tax liabilities. Abro stressed the need for coordination between the FIA and FBR, directing authorities to thoroughly investigate evidence of fraud, tax evasion or financial irregularities, recover taxes and penalties, and pursue criminal charges against non-compliant companies or officials where warranted.
The committee was also briefed on around 20 import entries over the preceding six months involving approximately Rs65 billion, 20 Goods Declarations and 19 factories. Authorities were directed to obtain factory and import records, verify the use of imported goods and determine whether certificates complied with the law.
Wheat Imports Fail to Bring Relief to Flour Prices
The committee ordered a comprehensive report by November 9, ahead of proceedings at the Peshawar High Court scheduled for November 12, 2026. The FBR and other relevant institutions were also directed to submit outstanding records within two days and complete a detailed report on five key companies by November 9.
The panel reviewed FBR officers’ performance in tax collection and directed that nominations for the Sitara-i-Imtiaz be reconsidered based on measurable contributions to protecting public funds, preventing tax evasion and recovering dues.
Under a separate agenda item, the committee examined the business activities of companies importing edible oil, ghee, steel, food items, polymers and tea. Authorities were instructed to scrutinize ownership, management structures and business dealings, including possible links between companies and court petitions, using documentary evidence rather than assumptions.
