The Senate Sub-Committee on Interior and Anti-Narcotics on Monday expressed serious concern over alleged tax evasion and misuse of the FATA/PATA tax exemption scheme, delays in recovering Rs800 billion in outstanding tax dues, and the Federal Board of Revenue's (FBR) failure to produce required records.
Chaired by Senator Saifullah Abro, the meeting reviewed missing records, unpaid taxes, and ongoing Federal Board of Revenue (FBR) and Federal Investigation Agency (FIA) probes regarding imported goods' consumption certificates. Severely displeased, Abro criticised the FBR for failing to recover billions in tax dues while Pakistan seeks foreign loans, accused the institution of misbriefing the Prime Minister, and demanded complete facts, warning that negligence and delays in protecting public funds would not be tolerated.
Asserting his commitment to bring the country's money back, Abro stressed that if investigations establish tax evasion or legal violations, responsible parties must be identified and outstanding amounts recovered. The committee was informed that imported goods worth approximately Rs1,120 billion under the FATA/PATA tax exemption scheme were under scrutiny, with records and consumption certificates relating to goods worth around Rs389 billion identified, while clarification remains required regarding the remaining imports and tax liabilities.
In total, 223 consumption certificates were issued to 108 companies, prompting the committee to question why complete information about imports, utilization, production, and tax payments was unavailable. Abro also sought an explanation supported by documentary evidence regarding approximately Rs85 billion and the extent to which legal requirements were fulfilled before releasing goods against the certificates.
Under prescribed procedure, companies were required to deposit an amount or pay order equivalent to the value of imported goods with customs authorities before release to factories, alongside submitting utility bills, bank statements, business records, and employee details for consumption certificates under SRO 2021.
Questioning the non-compliance with these rules, Abro directed the FBR to produce consumption certificates and complete records of 20 major companies identified previously, emphasizing that officers and inspectors were responsible for scrutinizing documents before issuing certificates. The committee instructed authorities to provide correspondence concerning questioned companies, records explaining why no objections were raised against others, and details of document scrutiny within two days.
The FBR representative explained that the law provides for document verification and that companies suspected of fraud could be selected for audit, with findings and recoverable tax liabilities pursued under the law. Abro rejected the response that audits were merely underway, demanding concrete information on progress, examined companies, and recovery steps, noting that parliamentary oversight aims to ensure institutions fulfill their responsibilities to protect the exchequer.
The committee was informed that the FBR issued notices to 512 companies, with some submitting complete records and others submitting partial documentation, while letters sent to 58 companies were returned or refused, 35 writ petitions were filed before the Peshawar High Court, and 174 beneficiaries sought legal recourse.