Senate questions FBR over Rs1,120bn tax-exempt imports

Islamabad: The Senate Sub Committee has raised serious questions over the Federal Board of Revenue’s failure to provide complete records related to Rs1120 billion worth of tax exempted imports in former FATA and PATA regions, while also seeking detailed tax information from major tobacco companies including Pakistan Tobacco Company and Philip Morris Pakistan Limited.

The matter came up during a meeting of the Senate Sub Committee convened by Senator Saifullah Abro at Parliament House. The Committee was reviewing press freedom concerns, cigarette smuggling networks, tax evasion issues and possible misuse of duty exemption systems.

At the beginning of the meeting, Pakistan Federal Union of Journalists President Afzal Butt raised concerns regarding remarks made about a private channel reporter during an earlier Committee meeting. Senator Saifullah Abro assured that the Committee respects every citizen and considers the media an important partner in highlighting national issues. He stated that the Committee would continue working on matters related to illegal tobacco trade and economic losses faced by the country.

At the beginning of the meeting, Pakistan Federal Union of Journalists President Afzal Butt raised concerns regarding remarks made about a private channel reporter during an earlier Committee meeting. Senator Saifullah Abro assured that the Committee respects every citizen and considers the media an important partner in highlighting national issues. He stated that the Committee would continue working on matters related to illegal tobacco trade and economic losses faced by the country.

The main focus of the meeting shifted towards the Federal Board of Revenue’s pending information regarding tax exempted areas. The Committee noted that raw materials worth Rs1120 billion entered tax exempt regions between 2018 and 2026 under exemption arrangements. Members expressed concern that manual tracking systems and a lack of automated verification could create risks of illegal movement of goods into taxable markets.

The Committee once again directed FBR to provide complete details of consumption certificates issued against the Rs1120 billion imports and submit tax related information for the tobacco sector, especially regarding Pakistan Tobacco Company and Philip Morris Pakistan Limited.

During the meeting, officials also discussed investigations into cigarette theft cases and illegal activities in the tobacco sector. The Federal Investigation Agency briefed the Committee about cigarette theft cases in Peshawar, Khyber Pakhtunkhwa.

The Committee also reviewed the investigation regarding senior officials and a tax charge sheet issued against Deputy Commissioner Inland Revenue Fahim Rashid in connection with Paramount Tobacco Company.

Another serious matter discussed was the theft of 2,828 cigarette cartons from an FBR warehouse. The cartons were reportedly valued at Rs25 crore. The Committee directed FBR to prepare clear Standard Operating Procedures for registering, handling and managing seized goods to prevent such incidents in the future.

The Committee also examined concerns related to cigarette smuggling and tax losses, stressing that illegal trade not only affects government revenue but also creates unfair competition for legal businesses.

The meeting also discussed government advertisement spending and tobacco industry media campaigns. The Committee reviewed information provided by the Press Information Department and Pakistan Electronic Media Regulatory Authority and stressed the need for greater transparency in advertisement payments and media related spending.

The meeting was attended by Senators Umer Farooq, Muhammad Talha Mehmood and Dilawar Khan as well as senior officials from the Ministry of Interior and Narcotics Control, Ministry of Information and Broadcasting, Press Information Department, FBR Inland Revenue, Customs, FIA, National Cyber Crime Investigation Agency and other relevant departments.

Senator Saifullah Abro directed all concerned institutions to provide the required information and continue cooperation with the Committee. The Committee made it clear that investigations into tax exemptions, tobacco sector irregularities and smuggling networks would continue until complete records and explanations were provided.