27 Firms Missing In Rs1.12trn Tax-Exempt Imports Inquiry

The Federal Investigation Agency (FIA) informed the Senate Standing Committee on Interior and Narcotics Control on Tuesday that the offices of 27 companies among 512 firms that issued consumption certificates for Rs1.12 trillion worth of tax-exempt imported raw materials could not be found at their registered addresses.

The disclosure came as the Senate committee questioned whether the FIA could independently investigate tax-related matters that fall under the Federal Board of Revenue (FBR), and called for a coordinated mechanism between the two institutions to avoid overlapping jurisdictions.

The committee, chaired by Senator Faisal Saleem Rehman, was reviewing allegations of tax evasion, illegal manufacturing and trade-related violations involving businesses operating in the former tribal areas and Khyber Pakhtunkhwa.

The inquiry covers consumption certificates issued between 2018 and 2026 for imported raw materials that received tax exemptions, involving a total value of Rs1.12 trillion.

FIA officials told the committee that the agency launched its inquiry on August 20 and issued notices to 512 companies. So far, 31 companies have submitted the required information, while owners of 17 companies have appeared personally before investigators.

Another 17 company owners have approached the Peshawar High Court against the FIA proceedings. They have sought to have the matter referred to the Senate Standing Committee on Finance and requested that the agency be restrained from taking further action.

The FBR disputed part of the FIA’s briefing, stating that the agency had issued notices but had not yet physically inspected the companies’ premises. FIA officials responded that physical site visits would also be conducted.

Lawmakers also referred to an estimated annual loss of $1 billion to the national exchequer because of alleged irregularities in tax-exempt areas. Senator Saifullah Abro, who had convened the subcommittee whose report was being considered, said the tax facility was intended to benefit residents of the former FATA rather than businesses allegedly exploiting the exemption.

Minister of State for Interior Talal Chaudhry said the committee had made considerable progress on the matter but pointed out that tax-related issues also fall within the jurisdiction of the Senate Standing Committee on Finance. He said the finance committee could subsequently refer relevant matters to the National Accountability Bureau (NAB) or the Ministry of Interior.

The committee decided to establish another subcommittee to examine the alleged tax evasion in greater detail. It also directed the FBR and FIA to submit comprehensive inquiry reports within one month, along with verified physical stock registers for the seized goods.

Cigarette warehouse theft also examined

Separately, the committee examined the reported theft of 2,828 cartons of cigarettes worth Rs250 million from FBR warehouses in Swabi and Mardan.

The FIA informed lawmakers that an FIR had been registered. However, committee members questioned why the investigation appeared to focus mainly on lower-ranking personnel, including inspectors, a driver and a watchman, rather than officials or other individuals who could potentially have been involved in moving such a large quantity of cigarettes.

Senator Dilawar Khan questioned whether inspectors or watchmen could have removed such a large consignment without the involvement of others.

Senator Talha Mahmood also raised concerns about individuals identified during preliminary inquiries allegedly not being included in the final challans.

The committee’s review of FBR warehouse arrangements further identified issues including missing CCTV cameras, unavailable inventory ledgers and unverified handovers of confiscated goods.

Officials also informed the committee that the Frontier Corps and Pakistan Rangers had been given anti-smuggling powers in border areas of FATA and PATA because of the prevailing security situation.