The Federal Board of Revenue (FBR) on Monday launched crackdown against Chief Financial Officers (CFOs) of companies allegedly involved in billions of rupees worth of sales tax fraud.
The regional directorates of the FBR’s Intelligence and Investigation department apprehended individuals from five companies across the country implicated in tax fraud.
The Large Taxpayer Offices (LTOs) under the FBR summoned CFOs of industries, business units, and companies suspected of tax evasion, warning them to deposit the stolen tax dues and refrain from signing off on illegal and fraudulent input tax claims.
Those who were found involved in tax fraud would face action.
According to FBR officials, a joint press conference held on October 10, 2024, by Finance Minister Muhammad Aurangzeb, FBR Chairman Rashid Mahmood Langrial, and Director General of Intelligence and Investigation Inland Revenue Aqeel Siddiqui announced a crackdown on businesses benefiting from fake and flying invoices.
Following this announcement, on October 14, 2024, the regional directorates of Intelligence and Investigation arrested five individuals, including a key fraudster involved in creating dummy businesses, along with four CFOs responsible for tax fraud.
The fraud has caused the national treasury to lose billions in sales tax revenue. In one operation, the Hyderabad Inland Revenue Directorate arrested the CFO and procurement officer of a well-known Lahore-based battery manufacturer, accusing them of assisting in sales tax fraud and filing fake input tax claims.
The Lahore Directorate supported the Hyderabad team in this intelligence-based operation, revealing that the fraudsters caused over a billion rupees in losses to the national treasury. In another operation, the Directorate of Intelligence and Investigation Inland Revenue Faisalabad arrested CFOs from two related textile units for filing fraudulent input tax claims related to coal, resulting in millions in losses.
First Information Reports (FIRs) have already been filed against suppliers, beneficiaries and other involved individuals.
Besides it, a suspect named Tasveer Shahid, linked to multiple FIRs, was arrested after his pre-arrest bail was denied on October 14, 2024.
This key suspect generated fake sales tax inputs through fraudulent and dummy units, which were used by end users or beneficiaries, leading to significant losses for the national treasury.
According to FBR officials, these arrests are part of a crackdown on the organized mafia involved in sales tax fraud across the country and are aimed at enhancing compliance with the tax laws enforced by the FBR.
