The Auditor General of Pakistan has uncovered tax irregularities exceeding Rs. 8.31 billion after the Federal Board of Revenue (FBR) allowed input tax adjustments to Tier-1 retailers that failed to comply with mandatory Point of Sale (POS) integration requirements.
According to the Auditor General’s audit report for FY2024-25, 1,323 Tier-1 retailers did not connect their outlets to the FBR’s POS system, despite the requirement under the sales tax regime. Nevertheless, they were permitted to claim input tax adjustments totaling Rs. 8.313 billion.
The report states that tax authorities also failed to initiate timely legal action against the non-compliant retailers, allowing the irregularity to persist.
In its reply to the audit, the FBR said all cases involving the Rs. 8.313 billion in disputed input tax adjustments are currently under examination.
The Departmental Accounts Committee (DAC) has directed the FBR to expedite legal proceedings against the retailers concerned and complete the recovery process without delay.
The Auditor General also recommended that all Tier-1 retailers be immediately integrated with the FBR’s POS system to ensure compliance and prevent further revenue leakage.
The report notes that the same issue had been highlighted in the previous audit, indicating that corrective measures were not effectively implemented. The Auditor General described the repeated lapse as a matter of serious concern requiring urgent action.
