FBR Tells Senate tobacco tax theft is Rs. 40 billion, not $1 billion  

Senate sub committee was told that tax evasion in the tobacco sector is estimated at around Rs. 40 billion, far below the government’s public

Islamabad: A Senate sub committee was told that tax evasion in the tobacco sector is estimated at around Rs. 40 billion, far below the government’s public claim of one billion dollars, or around Rs. 280 billion, raising serious questions over official figures, public advertisements and the briefing given to the Prime Minister.

The most sensational moment of the meeting came when officials of the Federal Board of Revenue, known as FBR, clarified that tobacco tax evasion stood at nearly Rs. 40 billion. This was much lower than the figure used in a government campaign, which claimed that tax theft in the tobacco sector was around one billion dollars every year.

Senator Saifullah Abro, who convened the Sub Committee of the Senate Standing Committee on Interior and Narcotics, expressed serious concern over the difference between the official briefing and the government’s public advertisement. He observed that awareness campaigns must be based on correct and verifiable information.

The committee was surprised that FBR officials were also unaware of the government campaign against tax theft being run across the country. Senator Abro said the situation was alarming and questioned how the Prime Minister and the Ministry of Information had been briefed about tobacco tax theft.

He directed FBR and other concerned authorities to bring the discrepancy to the Prime Minister’s notice and take steps to correct the advertisement if the figures were not accurate.

The committee also reviewed action against tobacco factories involved in alleged tax fraud. Officials informed members that FBR had seized 16 tobacco factories on charges of tax evasion and fraud.

The committee was also briefed on the rules and regulatory framework linked with the tobacco industry. Senator Abro expressed displeasure over the absence of senior officials from relevant departments. He said officers must attend committee meetings, especially when issues of national revenue, smuggling, tax fraud and governance are being discussed.

He said departmental leadership has a responsibility to ensure that institutions work properly and effectively. According to him, weak attendance and poor coordination create problems in dealing with serious national issues.

The committee also examined allegations that raw materials imported for tax exempt areas were being diverted and used in other parts of the country. Members were told that such misuse could cause major revenue losses to the national exchequer.

Senator Abro directed all relevant departments to submit complete information and detailed proposals on the matter in the next meeting. He said the committee needed clear facts to understand how tax-exempt facilities were being misused.The issue of smuggling of Iranian petroleum products also came under discussion. The committee took notice of videos circulating on social media and urged FBR and other enforcement agencies to take strict action against the people involved.

The Federal Investigation Agency, known as FIA, also briefed the committee on the case involving the theft of 2,828 cartons of cigarettes. Senator Abro assured full support to the investigation team and directed that strict action should be taken against all persons involved.He said action should also be taken against any senior FBR officials if they are found responsible. He called for arrests wherever the law required them.

At the end of the meeting, the committee directed all concerned departments to submit complete records of smuggling and tax evasion cases. Members said those involved in tax fraud, smuggling and misuse of public systems must be brought to justice without discrimination.