Senate Panel Takes Up Cigarette Theft 1bn Annual Tobacco Tax Loss

سینیٹ کمیٹی کا سگریٹ چوری اور سالانہ ایک ارب ڈالر ٹیکس نقصان پر اظہار تشویش

Senate Panel Takes Up Cigarette Theft 1bn Annual Tobacco Tax Loss

The Senate Standing Committee on Interior and Narcotics Control on Tuesday expressed strong dissatisfaction with the nomination of lower rank officials in the FIR over the theft of 2,828 cartons of cigarettes and stressed that the officers responsible must be held accountable. Chairing the committee meeting, Senator Faisal Saleem Rehman directed the Federal Board of Revenue (FBR) and FIA to submit comprehensive inquiry reports within one month, present verified physical stock registers for all seized warehouse goods and ensure that future enforcement actions strictly target main beneficiaries and factory owners rather than the field personnel.

The committee conducted an extensive parliamentary scrutiny into national tax leakages, customs border security and consular facilitation for overseas Pakistanis. The committee evaluated the detailed sub-committee report submitted by Convener Senator Saifullah Abro, which focused on an estimated USD1 billion in annual revenue loss attributed to tax-evasion, illicit manufacturing, and trade malpractices in the tobacco sector, factories operating in the tax-exempted areas (FATA, PATA and Khyber Pakhtunkhwa), and theft of 2,828 cartons of cigarettes and allied matters.

The members expressed strong dissatisfaction with the nomination of lower rank officials in the FIR and stressed that officers responsible must be held accountable. The committee directed the FIA to intimate it on the progress in the investigation. Examining multi-billion-rupee tax exemptions for FATA/PATA areas, the committee members questioned why administrative notices were issued across a Rs1,120 billion tax-exempted zone while primary factory owners avoided accountability and low-level transport drivers were to deal with arrests and legal proceedings.

Senator Talha Mahmood raised critical concerns over procedural flaws during the initial registration of cases, noting instances where key figures identified in preliminary inquiries were excluded from final charges. Further auditing of the Federal Board of Revenue (FBR) warehouse protocols revealed serious gaps, including missing/unavailability of CCTVs, non-existent inventory ledgers and unverified handovers of confiscated contraband. Addressing jurisdictional overlap and operational mandates, the committee examined the legal grounds allowing the FIA to initiate independent tax inquiries into the Federal Board of Revenue (FBR) matters, directing both institutions to establish a synchronised operational mechanism.

The committee reviewed notifications empowering the Frontier Corps (FC) and Pakistan Rangers with anti-smuggling authority across border zones in FATA and PATA, with the state minister and interior ministry officials detailing that operational powers were delegated due to complex local law and order situations. The committee decided to further pursue the matter of tax-evasion, causing loss to the national exchequer. It was also decided to constitute a sub-committee to further investigate the matter.

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