A Senate panel has questioned the Federal Board of Revenue’s handling of alleged tax evasion involving FATA and PATA import exemptions. Its chairman, Senator Saifullah Abro, accused the tax authority of protecting corrupt individuals and warned of penalties and money-laundering cases.
The senator also alleged that the finance minister remained unaware of developments within his own ministry. The remarks came during a review of delayed tax recoveries and investigations into imported goods.
The Senate Sub-Committee on Interior and Anti-Narcotics examined approximately Rs800 billion in outstanding tax dues. It also questioned the FBR’s handling of consumption certificates and records linked to the former Federally Administered Tribal Areas (FATA) and Provincially Administered Tribal Areas (PATA).
Senate Panel Questions Missing Import Records
The committee reviewed imports worth approximately Rs1,120 billion under the FATA/PATA tax exemption scheme. Officials identified records and consumption certificates covering goods worth around Rs389 billion.
However, questions remain about the remaining imports, their utilisation and potential tax liabilities. Abro criticised the FBR’s failure to recover substantial dues and demanded complete documentation.
Officials informed the panel that 223 consumption certificates had been issued to 108 companies. However, the committee questioned why complete information about imports, production, goods utilisation and tax payments remained unavailable.
Abro also demanded documentary evidence concerning approximately Rs85 billion. He questioned whether authorities had fulfilled legal requirements before releasing the imported goods.
Under the prescribed procedure, companies must deposit an amount or pay order equivalent to imported goods’ value. They must submit this payment to customs authorities before receiving the goods.
Furthermore, companies must provide utility bills, bank statements, business records and employee details. These documents support applications for consumption certificates under the relevant 2021 SRO.
The committee directed the FBR to provide complete records and consumption certificates for 20 previously identified major companies. It also requested correspondence concerning companies under investigation and explanations for cases where officials raised no objections.
Additionally, the panel demanded details of document verification within two days.
FBR Issues Notices to 512 Companies
An FBR representative told the committee that the law allows authorities to verify documents and select suspected companies for audits. The department would pursue findings and recoverable tax liabilities through legal procedures.
Officials informed the panel that the FBR had issued notices to 512 companies. Some businesses submitted complete records, while others provided only partial documentation.
Letters sent to 58 companies returned undelivered or were refused. Meanwhile, 35 writ petitions reached the Peshawar High Court.
Another 174 beneficiary companies approached the court seeking relief against the inquiry.
Abro warned that missing records and ongoing litigation could obstruct investigations. He directed authorities to compile information about the companies, owners, business activities, notices and pending court cases.
He also urged the FBR to defend its position with complete documentary evidence.
Potential Tax Recovery Estimated at Rs400–500 Billion
The committee discussed potential tax liabilities and penalties ranging between Rs400 billion and Rs500 billion. However, authorities must verify the records and complete legal scrutiny before establishing the recoverable amount.
The panel also reviewed the FIA’s investigation into imported goods, consumption certificates and company activities. Abro called for stronger coordination between the FIA and FBR.
He directed both institutions to investigate evidence of fraud, tax evasion and financial irregularities. Authorities must also recover outstanding taxes and penalties.
Furthermore, the committee called for criminal proceedings against non-compliant companies or officials where evidence and legal grounds justify such action.
Investigation Covers Rs65 Billion in Import Entries
The committee received details of approximately 20 import entries recorded during the preceding six months. These entries involved goods worth around Rs65 billion, 20 Goods Declarations and 19 factories.
Authorities must obtain factory and import records to establish how companies used the imported goods. They must also determine whether the relevant certificates complied with legal requirements.
The panel ordered a comprehensive report by November 9. This deadline comes ahead of proceedings scheduled at the Peshawar High Court on November 12, 2026.
Meanwhile, the FBR and other relevant institutions must submit outstanding records within two days. The committee also requested detailed reports on five key companies by November 9.
Senate Panel Reviews FBR Officers’ Performance
The committee also examined the performance of FBR officers in tax collection and revenue recovery. It directed authorities to reconsider nominations for the Sitara-i-Imtiaz.
The panel said nominations should reflect measurable contributions to protecting public funds, preventing tax evasion and recovering outstanding dues.
Under a separate agenda item, members reviewed businesses importing edible oil, ghee, steel, food products, polymers and tea.
Authorities must examine company ownership, management structures and business dealings. They must also investigate possible links between companies and court petitions.
The committee emphasised that investigators should rely on documentary evidence rather than assumptions when examining these connections.
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