With the assistance of its top intelligence agency, the Federal Board of Revenue (FBR) has identified a massive sales tax fraud operation involving billions of rupees across numerous critical industries. Coal, oil and ghee, textile, paper and board, steel, lead, lead waste, and scrap are among these industries.
The Directorate General of Intelligence and Investigation Inland Revenue (l&I-IR) has methodically identified illicit input tax adjustments of roughly Rs. 70 billion from May to August 2023. This extensive operation has taken place in major cities around the country, resulting in the arrest of more than 30 people suspected of tax evasion.
This heinous tax evasion has invaded a wide range of significant businesses, including coal, iron/steel, textile, cotton ginning, lead waste and scrap, copper wire, textile, auto components, and plastic products makers.
However, the discovery does not end there. The Directorate has also caught tax attorneys and consultants who are actively assisting these criminals in their unlawful operations.
Under the Sales Tax Act of 1990, the Directorate General of l&I-IR has increased its enforcement efforts to fight widespread illicit input tax adjustments and the issue of phony or fraudulent invoices. The major goal is to level the playing field for honest taxpayers while eliminating the threat of tax fraud.
This disclosure is a key step in preserving the integrity of financial systems and ensuring that fraudulent operations are strictly prosecuted. The FBR’s commitment to combating tax fraud will help to create a more equitable and transparent financial environment.