In a major operation against sales tax fraud, the Federal Board of Revenue’s (FBR) Intelligence and Investigative Department arrested five suspects allegedly involved in a scam that cost the national exchequer billions of rupees.
One of FBR’s ongoing initiatives is to prevent organized tax fraud networks and stop the generation of fake and fraudulent invoices. The regional Directorates of Intelligence & Investigations Inland Revenue across the country conducted operations, leading to these significant arrests on Monday.
Among the arrested are a notorious fraudster and four chief financial officers (CFOs) accused of participating in fraudulent activities using dummy companies. In Hyderabad, the CFO and a purchase officer from a prominent Lahore battery manufacturing company were arrested for helping the company fraudulently recover over Rs1 billion in input tax paid on lead.
In Faisalabad, two CFOs from a group of textile ventures were detained for their involvement in input tax claims on coal, causing the treasury to lose hundreds of millions of rupees.
Taswar Shahid, a key suspect, was arrested outside the court after his pre-arrest bail was denied. He is accused of operating fictitious companies and adding fake sales tax inputs, leading to substantial financial losses for the government.
The FBR’s crackdown is part of a larger effort to enhance tax compliance and address large-scale financial crimes. FBR Chairman Rashid Mahmood Langrial recently stated that annual sales tax fraud exceeds Rs3 trillion, often with CFOs of major corporations involved as accomplices.