The Federal Board of Revenue (FBR) failed to collect Rs. 117.78 billion in super tax from 527 large taxpayers over the past two years due to weak enforcement and shortcomings in its tax return system, according to the Auditor General of Pakistan’s Audit Report 2024-25.

The audit identified major irregularities in super tax assessment and recovery across 19 FBR field offices, highlighting persistent gaps in tax administration that have resulted in significant revenue losses.

According to the report, the FBR’s return filing system is not capable of accurately calculating super tax because it excludes certain taxable income while computing tax liability. The Auditor General said this has led to repeated instances of under-assessment and under-collection of super tax.

In its response, the FBR informed auditors that recovery proceedings have been initiated in cases involving Rs. 71.21 billion in unpaid super tax.

The remaining Rs. 46.56 billion is tied up in litigation and is currently pending before various courts, the tax authority said.

Following the audit observations, the Departmental Accounts Committee (DAC) directed the FBR to expedite legal action, complete the recovery process where possible, and submit a progress report to the audit authorities.

The Auditor General recommended upgrading the FBR’s tax return system to ensure super tax is automatically calculated using all applicable sources of income, reducing the risk of future revenue leakages.

The report further noted that deficiencies in super tax collection have been repeatedly highlighted in previous audit reports, indicating that the issue has remained unresolved despite repeated observations.