- 1026 Taxpayers do not pay a super taxman RS167.9bn.
- 1,084 taxpayers claimed unacceptable commercial fees.
- The concealment of income results in 54.2 billion rupees in unpaid tax.
Islamabad: At a time when Pakistan desperately needed to increase its income and expand its tax base, tax evaders continue to siphon hundreds of billions of rupees with virtual impunity, while the Federal Board of Revenue (FBR) cannot respect the law.
This austere image emerges from the general verifier of the last report of Pakistan for the financial year 2024-25, which documented tax evasion and the application of failures costing the nation hundreds of billions each year.
The report indicates thousands of cases where taxpayers are involved in widespread sub-declarations, false complaints, non-deputy yields, improper use of tax credits and income concealment. These tax evaders are encouraged by poor surveillance, delayed action and low internal controls on the FBR field offices.
Despite the repeated results of similar irregularities in previous years, the report notes that no significant corrective measure has been taken – a model that the verifier general calls “a serious concern”.
Super tax is massively dodged by the rich. Reading the report shows that the most disturbing is the escape of super taxes – a levy on high income employees making more than 150 million rupees per year. According to the report, 1,026 taxpayers have not paid super taxes, costing the RS167.9 billion chessboard. The FBR, despite the legal authority and the mechanisms to enforce payment, has not initiated procedures in a timely, allegedly due to low surveillance. Only RS48 million of the amount owed was made in fact – an amazing 0.02%.
Similarly, 1,084 taxpayers have claimed unacceptable commercial costs, in particular financing costs and costs on which no deduction tax has been deducted – violations under article 21 of the income tax order. This caused a deficit of 149.5 billion rupees. Again, while the procedures were “initiated”, practically no recovery has been carried out and most of the cases remain unresolved.
The report signals another RS 45.3 billion unpaid retained taxes. In 1,344 cases, the agents did not deduce or deduce from payments to suppliers and entrepreneurs. However, the FBR has not applied the provisions of personal responsibility against these agents, as required by the law. The procedures have been delayed or not finalized, with only 2.4 million rupees recovered.
The Auditor General warns that the administration and payment system of synchronized restraint (Swaps) is implemented quickly, the systemic leak will continue.
The report also shows that taxpayers have also hidden revenues worth billions by subcontracting sales or inflating purchases in their income declarations, with discrepancies identified between sales tax and income tax declarations. In 1,181 of these cases, concealment led to 54.2 billion rupees of unpaid income tax.
In addition, 992 reported sales tax declarations have been proven to have hidden sales, declared less production (compared to electricity consumption) or did not take into account closing actions, dodging 36 billion rupees in sales tax.
In both cases, no significant application has followed. A particularly alarming revelation was the use of false or flying invoices to claim reimbursements of sales tax or adjustments of the entries. In 375 cases, taxpayers claimed credits based on invoices issued by companies on black or suspended list – a violation of the sales tax law.
The loss of these fraudulent complaints alone exceeded 123.5 billion rupees. Most cases remain under investigation or judiciation, some still missing a ministerial response.
The report also reveals that 14,697 registered taxpayers, all with national tax numbers, did not produce declarations – a violation which should have triggered automatic penalties under article 182.
However, the penalties worth 26.6 billion rupees were not imposed or collected. The FBR has recovered a simple RS0.05 million in this category – an almost total collapse of the application.
Even in cases where tax responsibility had already been evaluated, 62.3 billion rupees remained not collected in 1,571 cases. Judicial procedures have been initiated in some, but again, no substantive resumption has been reported.
Another RS23.3 billion was lost due to the tax non -become declared under “other sources” – which includes various profits not covered by other tax chiefs. In 1,764 cases, FBR did not take any measures to assess or recover the tax on this income.
The 392 -page audit of the FBR is full of details on how tax escapes pay while the FBR looks in the other direction. The report of the verifier general shows that almost all the main questions have been raised several times in the audit reports from 2019 to 2024, but the same irregularities remain recurrent, and the field officers are faced with no responsibility for inaction.
Each of the losses cited represents money that could have been spent on schools, hospitals, public security or infrastructure.
To check the major failures, the report recommends that recovery of the tax evaluated must be accelerated without delay, legal procedures and arbitration must be reinforced in time and independently monitored, internal and office audit mechanisms must be reinforced using risk -based approaches, integration of provincial and federal databases (for example, land, Completed, IT checks must block the fraudulent revocation (the claims of redesign linked to the dark. The audit report has published a frank warning: “Recidivating the same irregularity is a matter of serious concern”.
Originally published in The news