The Federal Board of Revenue (FBR) has initiated a comprehensive internal audit of cash rewards amounting to Rs 484.44 million (Rs 48.44 crore) distributed to officials and informers between July 2021 and December 2025 after serious irregularities were highlighted by the Auditor General of Pakistan (AGP).
According to the AGP’s audit findings, the rewards were allegedly disbursed without proper assessment of merit and in violation of prescribed rules governing incentive payments.
Under existing reward regulations, payments linked to cases involving tax and duty evasion or confiscation of goods can only be approved after the government has successfully realized the outstanding duties and taxes. Employees are eligible for rewards strictly on the basis of exceptional or meritorious performance.
The FBR maintained before auditors that the payments were approved by the Board and granted in recognition of outstanding services rendered by officers and staff.
Meritorious performance, as defined under the rules, includes surpassing revenue targets through exceptional planning, achieving significant recoveries of arrears, expanding the taxpayer base, effectively defending cases before the Appellate Tribunal Inland Revenue (ATIR), and demonstrating extraordinary professional commitment or innovative contributions.
Despite these provisions, the AGP directed the FBR to strengthen oversight of the reward system and ensure that incentives are granted only where merit is clearly established.
The audit also found that certain payments were made to Commissioners Inland Revenue (Appeals), their staff, and departmental representatives involved in case processing, raising concerns over the appropriateness of such disbursements. The AGP further ordered recovery proceedings against 40 tax officials who received rewards in violation of rules during the past two fiscal years.
Sources said the FBR has tasked its Chief (Legal) with supervising a dedicated audit team to review all rewards sanctioned, paid, or pending in Customs (Enforcement) Collectorates in Lahore, Multan, and Quetta during the review period.
The audit will examine fully and partially released rewards, unpaid claims, verification of shares allocated to informers, staff and the Customs Performance Fund (CPF), as well as scrutiny of both matured and non-matured reward cases.
Officials have been instructed to complete the audit exercise within three weeks and submit a detailed report to the FBR Board for further action.
