Rs 730.7 billion import gap exposed in FATA/PATA tax exemption probe, senate seeks records

An apparent difference of Rs730.797 billion between import records and consumption certificates has raised serious questions

Islamabad:  An apparent difference of Rs730.797 billion between import records and consumption certificates has raised serious questions about the use of tax exemptions under the FATA/PATA scheme, prompting a Senate subcommittee to demand a detailed investigation into possible tax evasion, diversion of goods, corruption and money laundering.

The Federal Board of Revenue (FBR) informed the Senate subcommittee that imports worth Rs1,120.662 billion were recorded between 2018 and June 2026. However, consumption certificates covered imports worth only Rs389.865 billion, leaving an unreconciled difference of Rs730.797 billion.

The figures were presented at a meeting of the Subcommittee of the Senate Standing Committee on Interior and Narcotics Control, chaired by Senator Saifullah Abro on November 10, 2026. Senator Umer Farooq and senior officials from relevant departments also attended.

The sector wise figures showed apparent differences of Rs148.248 billion in steel, Rs146.955 billion in textile and fabric, Rs100.884 billion in food, and Rs76.487 billion in ghee and oil.

The investigation has also raised questions about the response of companies. The Federal Investigation Agency (FIA) informed the committee that it had issued 512 notices to different companies. Only 19 companies joined the proceedings and provided partial records, while more than 100 notices were returned or remained undelivered.

The FIA told the committee that the investigation was continuing and the matter was before the competent court. It said possible corruption, abuse of authority, diversion of goods and wrongful release of securities were being examined. The proceedings are investigative in nature, and no final finding of guilt has been announced.

The committee was also informed that consumption certificates were expected to have been issued for 60 of the 223 companies involved in the matter. Senator Abro demanded a complete explanation of the certificates, the amounts released against them and the documents supporting their issuance.

He specifically questioned 20 consumption certificates involving around Rs64 billion and directed the FBR to provide their complete records and justification. He also referred to terms of reference involving approximately Rs74 billion and questioned whether payments had been released without proper verification and scrutiny.

Senator Abro directed the FBR to examine the Statement of Requirements issued in 2021 and determine whether the certificates and payments had been processed under the applicable legal framework. He said the investigation must cover all companies and individuals who may have been involved, rather than being limited to selected cases.

A serious concern also emerged over coordination between the FBR and FIA. FBR officials told the committee that the department had not received a formal court notice, while the FIA said its legal adviser had received the relevant court order. The chairman and members questioned why the FBR had remained unaware of the court proceedings for nearly two months.

The chairman also expressed concern over the FBR’s reluctance to share relevant records with the parliamentary committee, despite being prepared to provide information to the court and other authorities.

Referring to Article 66 of the Constitution, Senator Abro questioned the legal basis for withholding information from Parliament and asked the FBR to explain which authorities could legally receive the records. Committee members stressed that parliamentary oversight should be respected and that legal procedures should not be used to delay accountability.

The committee also raised concerns about individuals reportedly holding expensive assets, travelling in large convoys of vehicles and having no clear declared sources of income. Senator Abro asked the FBR to investigate possible financial irregularities and money laundering, including the financial trails of influential individuals and networks.

Another major issue discussed was the alleged movement of tobacco related material through the FATA/PATA tax exemption system and its possible use by companies operating outside the exempted areas.

The chairman said the matter required coordinated action by the FIA, FBR, Customs and other enforcement agencies. He directed the authorities to provide complete import records from January 2018 onwards, including details of consignments, their routes, destinations and the companies involved.

The relevant Customs authorities were also asked to provide records of imports through Khyber Pakhtunkhwa and FATA, particularly for the period after June 2026. The committee wants investigators to examine container tracking and establish whether companies operating in other parts of the country used the exemption mechanism improperly.

Officials informed the committee that a significant number of companies had already been referred to the FIA, while other cases remained under examination.

Senator Abro said the investigation must proceed without fear or favour because the money involved belonged to the people of Pakistan. He urged the FBR to take responsibility and ensure that no company or individual found involved in wrongdoing escaped accountability. He also asked officials to seek law enforcement support where security conditions prevented them from visiting factories and checking records.

The chairman directed that the next subcommittee meeting, scheduled for November 16, 2026, be held in camera to examine sensitive financial and investigative records.

The FBR has been ordered to bring complete details of all consumption certificates issued from November 2025 onwards, along with related payments, pay orders, supporting documents and verification records. It must also provide details of the remaining companies under investigation.

Khyber Pakhtunkhwa Customs authorities have been given four to five working days to provide the required import and movement records, covering the different routes and customs systems through which consignments were processed.

The committee has also asked the FBR to examine the list of companies and petitioners involved in court proceedings, verify their individual positions and issue notices wherever necessary. Senator Abro said the department should clearly present its legal position instead of waiting for further directions.