Following the recovery of nearly Rs. 700 million from a leading exporter in Faisalabad, the Federal Board of Revenue (FBR) is intensifying its efforts to track down Chief Financial Officers (CFOs) of companies implicated in sales tax fraud. This development comes amid reports that many CFOs have gone into hiding, fearing arrest by FBR’s intelligence agencies.

In a significant case, a prominent textile exporter from Faisalabad has already deposited a substantial amount of evaded sales tax, including the principal amount and penalties. The fraudulent activities, orchestrated by a network of fraudsters, have resulted in hundreds of millions of rupees in losses to the national exchequer.

The FBR has issued a stern warning to the CFOs of these companies, urging them to settle their outstanding taxes, which amount to billions, including principal amounts and additional taxes/penalties, to avoid prosecution. Sources indicate that the CFOs are apprehensive about being the next targets following the recent arrests of their counterparts involved in tax fraud. Many have reportedly fled or are in hiding to evade FBR raids and enforcement actions, which is hindering the agency’s ongoing crackdown on fraudulent units nationwide.

Officials have noted that these CFOs are acutely aware of the political support backing the enforcement actions against tax evaders, which could lead to their eventual arrest and prosecution in court.

The Regional Directorates of Intelligence & Investigations Inland Revenue have already arrested five individuals across the country, including a key figure in creating chains of dummy businesses and four top management members (CFOs) responsible for significant sales tax fraud.

These arrests are part of a nationwide crackdown on organized crime and beneficiaries involved in sales tax fraud, aligning with FBR’s enforcement measures to boost tax compliance. This marks the first instance of CFOs from major textile companies being apprehended.