FBR uncovers Rs22 trillion tax fraud through fake invoices – SUCH TV
The Federal Board of Revenue (FBR) has uncovered tax evasion exceeding Rs22 trillion over the past two financial years, mostly through the use of fake and “flying” invoices. This massive fraud exposes the weaknesses in enforcement that lead to substantial losses of public funds.
While briefing the Senate Standing Committee on Finance and Revenue, FBR member Hamid Ateeq Sarwar disclosed that in the last fiscal year alone, over Rs873 billion worth of fake invoices were detected, down from Rs1.37 trillion the previous year.
The cumulative total of such fraudulent invoices over two years now stands at Rs2.2 trillion.Sarwar highlighted that this figure represents about one-third of the total tax collected by customs, indicating a severe blow to national revenue.
He warned that losses on such a scale cannot be allowed to continue and stated that strict actions have been taken against tax officials found misusing their powers.Under a law enacted in 1996, if tax officers have reasons to believe tax evasion or record tampering is taking place or suspects fleeing abroad, they have the authority to make arrests.
However, the latest Finance Bill for 2025-26 introduces safeguards to protect taxpayers and businesses from harassment during investigations.The committee also discussed concerns raised by chambers of commerce about the powers granted to FBR to arrest individuals on mere suspicion.
In response, Minister of State for Finance, Bilal Azhar Kayani, announced that the Prime Minister has formed a committee to address these complaints and that another committee reviews traders’ issues regularly.Kayani added that after thorough consultations with the business community, a circular will soon be issued to clarify the ambiguities in the bill.
Senator Saleem Mandviwala and other members agreed that attempting to amend the Finance Bill so soon after its approval—especially after gaining International Monetary Fund (IMF) approval—would not be advisable.
FBR member Dr. Najeeb acknowledged that the bill had been softened after pushback from coalition partners, parliamentarians, and other stakeholders. He admitted the parliamentary debate did not allow enough time to clear all doubts, which has led to some misunderstandings.
However, he stated that concerns about the bill are being exaggerated.Beyond tax fraud, the committee recommended that the State Bank of Pakistan (SBP) provide detailed data on freelancers’ contribution to software exports.
It also suggested removing subscriptions for journals and periodicals from taxable IT services.
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