NAB Transfers Property to PSO: Tax Implications to Consider

The National Accountability Bureau (NAB) Karachi has formally transferred a confiscated property to Pakistan State Oil (PSO), resolving a decades-old corruption case with significant tax implications for involved entities. Our tax law firm emphasizes the need for clients to understand the fiscal consequences of such asset recoveries and ensure compliance with Federal Board of Revenue (FBR) regulations.

The property was seized from Iqbal Ahmed Turabi, a former Manager of Banking at PSO, and his wife, convicted of amassing wealth beyond known sources. Following NAB’s inquiry and Reference No. 39/2001 filed in the Accountability Court, the couple received 10 and 5 years of rigorous imprisonment, a Rs95 million fine, and asset confiscation. Their appeals were rejected by the Sindh High Court and Supreme Court, solidifying the ruling.

On April 30, 2025, NAB Karachi DG Javed Akbar Riaz handed over the property to Brigadier (R) Rizwan Ahmed, PSO’s General Manager, during a ceremony at NAB’s headquarters. For PSO, this asset recovery may trigger tax obligations, such as capital gains tax (CGT) under Section 37 of the Income Tax Ordinance, if the property is later sold, currently at 15% for assets held less than a year. Additionally, PSO must ensure accurate valuation and reporting of the asset in financial statements to comply with FBR guidelines, avoiding penalties for under-reporting.

Clients in similar situations must also assess deductibility of legal expenses incurred during such cases under Section 29, ensuring proper documentation for tax filings. This case highlights the importance of transparent income reporting to avoid NAB scrutiny and subsequent tax reassessments.

Our firm advises clients to review asset recovery impacts, ensure FBR compliance on CGT and financial reporting, and safeguard against tax risks in corruption-related proceedings.