AGP Orders FBR to Recover Rs925B in Tax Irregularities

The Auditor General of Pakistan (AGP) has mandated the Federal Board of Revenue (FBR) to reclaim over Rs925 billion from taxpayers following the detection of grave financial and procedural irregularities in the Inland Revenue and customs departments during the 2024-25 audit period, as per Business Recorder.

The comprehensive audit, spanning the fiscal year, unearthed a recovery target of Rs925.8 billion, with Rs19.3 billion already recouped between January and December 2024. These revelations signify a 25% escalation in recovery relative to the preceding fiscal year.

The audit report pinpointed core deficiencies, such as flaws in tax assessments, culminating in revenue leakage and inadequate tax collection from existing taxpayers.

Key anomalies included Rs3,882.61 million in tax credits claimed post the registration due date under incentive schemes, alongside Rs2,461.47 million sought beyond the prescribed five-year limit.

Further, a prospective loss of Rs8,385.75 million emerged from non-compliance with tax rules in the real estate sector, while Rs557.77 million in inadmissible tax credits were erroneously granted to property buyers via fake NTN/CNICs.

In the steel sector, Rs512.01 million in sales tax lingers uncollected from blacklisted individuals, coupled with Rs249.78 million deemed inadmissible for input tax adjustments.

Within income tax purview, the audit exposed that 22 FBR field offices overlooked minimum tax realization totaling Rs22,874.66 million across 1,652 cases. Concurrently, 20 FBR field offices neglected Rs167,887.87 million in super tax over 1,026 cases, and 18 offices forfeited Rs149,571.28 million in income tax owing to inadmissible expense claims in 1,084 cases.

The report further disclosed that 19 FBR field offices failed to retrieve Rs45,386.45 million in withholding tax from 1,344 cases, while 16 offices missed Rs62,318.02 million in tax demands spanning 1,571 cases.

Moreover, the audit unearthed that 19 FBR field offices approved inadmissible refunds amounting to Rs6,795.41 million in 817 cases, whereas 6 field offices under-realized Rs2,253.86 million due to non-apportionment of expenses in 15 cases.

The report also illuminated that 19 FBR field offices neglected oversight of Rs123,585.02 million in input tax credit tied to invoices from suspended or blacklisted taxpayers and fake invoices across 375 cases.

The AGP has instructed the FBR to initiate immediate action to rectify these lapses, stressing the urgency for enhanced fiscal management, rigorous enforcement of tax regulations, and amplified transparency in the tax collection process.