Federal Revenue Leakages Exceed Rs 662 Billion per Auditor‑General’s Report uncovers
(Audit Year 2024–25, Financial Year 2023–24)
In its latest audit of the Federal Board of Revenue’s (FBR) performance for the financial year 2023–24, the Auditor‑General of Pakistan (AGP) uncovered sustained and serious revenue shortfalls totaling Rs 662.7 billion. Of this massive amount, income‑tax under‑collection alone accounted for Rs 457 billion, making it the largest single drain. Alongside, the combined slippage on sales tax and federal excise duty (FED) added another Rs 186.7 billion, bringing the cumulative federal revenue shortfall well beyond the half‑trillion‑rupee threshold.
These alarming figures reflect systemic weaknesses in FBR’s enforcement and monitoring mechanisms, particularly in areas pertaining to tax compliance, data validation, litigation management, and digital auditing infrastructure.
📊 1. Income‑Tax Shortfall – Rs 457 billion
The AGP identified eight recurring weaknesses responsible for the staggering Rs 457.1 billion in income‑tax losses:
-
Unrecovered Super Tax (Rs 167.9 billion)
Over 1,600 cases were cited where super tax was imposed but never recovered. The AGP flagged consistent follow‑up failures, noting extended delays and inertia in driving these cases to resolution, including inadequate intervention by litigation and enforcement wings. -
Inflated Deductions by Taxpayers (Rs 149.6 billion)
In 18 field offices, auditors observed that taxpayers claimed inadmissible and inflated deductions. The FBR teams in these offices failed to rigorously verify or challenge inflated expense entries, allowing significant revenue bleed. -
Assessed Demands Uncollected (Rs 62.3 billion)
These are taxes that had been officially assessed and adjudicated, yet remained uncollected. The auditors emphasize chronic inefficiency in enforcing assessments through mechanisms like attachment of assets or bank liens. -
Uncaptured Withholding Tax (Rs 45.4 billion)
Withholding taxes, primarily extracted at source from salaries, dividends, and contractor payments, went largely untracked. FBR’s information reconciliation between withholding agents and payees was deemed inadequate. -
Minimum Tax Not Realised (Rs 22.9 billion)
Taxpayers subject to minimum tax regimes did not pay in full, with no forceful recovery measures in place. The auditors pointed to sub‑par follow‑ups and deficient legal action. -
Other Contributing Factors
The remaining Rs 9 billion loss was attributed to various minor issues—delays in tax year audits, incomplete use of digital systems for filings, and insufficient cross‑verification between revenue and customs data.
Impact:
Combined, these lapses point to chronic weaknesses in FBR’s enforcement, collection follow‑ups, data validation, and inter‑departmental coordination—particularly affecting compliance and realization in high‑value taxpayers.
🔄 2. Sales Tax and Federal Excise Duty (FED) Leakages – Rs 186.7 billion
The AGP audits, which assessed select FBR field offices, identified Rs 186.7 billion in losses across sales tax and excise duty due to eight main issues:
-
Bogus Input‑Tax Credits – Rs 123.6 billion
A single strain emerged as the largest culprit: taxpayers claiming credits against invoices from suspended, black‑listed, or non‑existent suppliers—often paper or shell entities. This basically converted a refundable tax into a giveaway. -
Failure in Input‑Tax Apportionment – Rs 8.5 billion
Many businesses engaged in both taxable and exempt supplies but failed to correctly allocate input tax, resulting in excess input tax claimed for exempt supplies. -
Under‑Reporting Sales – Rs 36 billion
Dealers deliberately under‑declared sales values, attributing this to possible collusion or failure of field audit teams to cross‑check supply chain and point‑of‑sale data. -
Inadmissible Exemptions Claimed – Rs 7.5 billion
Businesses claimed exemptions to which they were not legally entitled. These included mis‑classifications, lapse in documentation requirements, or legal misinterpretation. -
Undue Input‑Tax Adjustments – Rs 5.5 billion
Adjustments in the electronic system allowed illicit downgrades of tax liabilities, with inadequate review or oversight, facilitating excess refunds or credits. -
Non‑Recovery of Penalties/Default Surcharges – Rs 3.5 billion
FBR consistently allowed the accrual of penalties and surcharges in default cases to remain on paper without initiating timely recovery. -
Unregistered Taxable Businesses – Rs 1.3 billion
Hundreds of businesses, especially in steel and retail sectors, operated without registration. This allowed unaccounted economic activity without oversight. -
Shortfall in FED Collection – Rs 788 million
Analysts flagged gaps in federal excise on products like gas, cement, and air travel—either due to underreporting or misapplication of applicable duty rates.
Systemic Issues:
Broadly, these deficiencies highlight lapses in digital invoice validation, inadequate field audits, opaque e‑filing adjustments, and weak mechanisms to detect shell or paper entities.
🚢 3. Customs Revenue Leakage – Rs 18.9 billion
In the customs domain, the AGP audit revealed Rs 18.9 billion in revenue loss, attributed primarily to four issues:
-
Confiscated Goods Not Auctioned – Rs 12.6 billion
Confiscated shipments sat idle in depots—goods never auctioned, leading to revenue opportunities lost. Logistics and auction triggers were found impaired. -
Unexported Duty‑Free Inputs – Rs 3.3 billion
Under duty‑drawback schemes, importers failed to ship finished goods abroad, forfeiting the requirement while still benefiting from duty waivers. -
Blanket Exemptions/Concessions – Rs 1.6 billion
Customs granted sweeping exemptions and concessions on various import lines, often without documented approval or clear policy basis. -
Misclassification of Imports – Rs 1.2 billion
Errors or intentional downgrades of product classifications caused significant undervaluation of goods, leading to underpaid customs duties.
Systemic Reflection:
These issues underscore flaws in post‑seizure asset disposition, weak oversight in concessional import schemes, and a lack of effective valuation enforcement.
📉 4. Nationwide Exposure “Likely Much Higher”
The AGP emphasizes that these figures are based on sample audits in selected field offices, acknowledging:
“The real nationwide exposure could be much higher.”
Such wording signals potential systemic leakage well beyond the Rs 662.7 billion quantified, possibly nearing or exceeding Rs 1 trillion annually if the patterns persist uncorrected.
🛠 5. Recommended Remedial Measures (18 Steps)
To plug these recurring leakages, the AGP recommends the following 18-step reform plan:
-
Deploy Risk‑Based Desk Audits
Extend coverage beyond physically audited taxpayers, emphasizing digital checks on transactions and returns. -
Implement “Ironclad” E‑Validation in IRIS and WeBOC
Systematically reject invalid invoices or vehicle declarations through real‑time integration and validation between sales, withholding, and customs systems. -
Form Independent Refund‑Audit Squads
Separate teams should rigorously vet every refund claimed, especially on input‑tax refunds, before issuing payments. -
Establish High‑Powered Litigation Cells
Special units within FBR should manage protracted legal cases, reducing delays, and aggressively adopt settlements or enforceable rulings. -
Reevaluate Incentive Schemes
The AGP specifically states “track‑and‑trace remains off‑track,” advocating for better adoption of digital ID‑based traceability systems. -
Cross‑Check Sales Chain vs. Supply Entities
Integrate POS, billing, and supplier registration data to detect fraud and fake invoices. -
Auction Standardization for Seized Goods
Set uniform timelines, ownership verification, and online auction mechanisms to quickly dispose of seized imports. -
Strict Monitoring of Duty‑Drawback Claims
Operate systems to verify end‑product shipments abroad before granting refund or duty draw‑back approvals. -
Enforce Rights Over Penalties and Default Surcharges
Launch enforcement including code‑based reminders, bank notices, and asset liens. -
Audit Blacklisted/Suspended Supplier Databases
Dynamically update supplier status; invoices from blacklisted entities should be auto‑blocked. -
Improved Training for Field Offices
Regular training in data validation, audit triggers, invoice review, interpretation of tax law, risk‑based filing selection, etc. -
Digital Invoice Trace‑Back Tools
Provide fields like QR codes or digital signatures to trace each invoice to the original issuing point in IRIS. -
Simplify Minimum Tax Regime Rules
Provide clarity, simplify due calculations, and benchmark filing to ensure compliance. -
Mandatory Registration Enforcement
Use trade body data, utility bills, mobile records, and field inspectors to identify unregistered businesses in sectors like steel and retail. -
Clear e‑refund Rules and Transparency
Ensure refund timelines, documentation policies, and refusal criteria are completely transparent and enforced. -
Track Super‑Tax Assigned Cases
Introduce a case‑management dashboard tracking assignment, notices, appeals, and recovery progress for each super‑tax file. -
Digitize High‑Value Asset Attachments
Pilot e‑lien filings on high‑value taxpayer assets to accelerate recovery actions. -
Mandatory Invoice Reconciliation Across Systems
Reconcile IRIS (sales tax), e‑filing (income tax), and WeBOC (customs) data, flagging inconsistencies in real time.
🔍 6. Diagnostic Analysis: Why These Measures Matter
-
Digital validation is central. Without real‑time vetting of invoices and customs declarations from blacklisted suppliers, the system invites fraud. A tightly‑integrated digital infrastructure can block fake invoices before any tax benefit accrues.
-
Litigation is costing billions. Huge tax demands lie dormant as contentious cases drag through legal processes, occasionally lingering for years. Speedier litigation resolution or settlements would unlock frozen revenue.
-
Asset recovery shortfalls. Non‑auctioned goods and uncollected taxes obscure FBR’s ability to convert authority into money. Institutionalizing digital liens and asset registers should address this.
-
Gaps in export verification. Duty‑drawback failures point to a leak‐by‐design flaw, where refunds proceed without verifying that goods truly exited the country.
-
Weak field audit discipline. Allowing inflated expenses or unverified deductions reflects inconsistent audit standards and inadequate internal checks across regional offices.
-
Poor inter‐system synergy. The failure to cross‑verify invoice issuance, tax filings, and customs filings openly invites manipulation and undermines revenue integrity.
🎯 7. Implications for Policy and Governance
-
Revenue Mobilization Threatened
The under‑collection — upwards of 5% of total federal receipts — strains the national budget, constraining development expenditures and inducing borrowings. -
Tax Justice Undermined
Honest taxpayers are penalized implicitly when defaulters evade liabilities. This breeds resentment and warps the social contract. -
FBR Credibility Intact Threatened
Recurring AGP audits reveal cyclical non‑action. Unless corrections are proactive, this undermines public confidence and invites international criticism. -
Fiscal Discipline Imperiled
Draft Budgets contingent on projected receipts hinge precariously if revenue shortfalls remain unresolved. -
Impediments to Digitalization Gains
Federal programs aiming for automation are thwarted by lack of holistic systems and accountability.
💰 8. Illustrative Case Examples (Hypothetical)
-
A Karachi‑based auto parts importer received duty exemptions on raw materials but failed to export finished goods. Despite the unrecoverable claim of Rs 50 million, follow‑up was never initiated.
-
A Lahore‑registered retailer claimed Rs 35 million in input tax from a shell company. The invoice was auto‐validated by the system and the refund processed. FBR didn’t block the transaction. A field audit later quantified the fraud—but the money was gone.
-
In Islamabad, a large taxpayer inflated allowed deductions—travel, marketing expenses—resulting in a tax demand shortfall of Rs 250 million. While flagged, no enforcement action followed due to litigation being stuck in the tax cell.
-
In Peshawar, a steel mill failed to be registered; it generated revenues of billions of rupees yearly but paid no sales tax. The AGP estimated an exposure of Rs 100 million annually for this single mill.
📌 9. AGP’s Call to Action: Must‑Do Lists for FBR
-
Immediate roll‑out of desk audits using analytics dashboards to flag unusual deductions, mismatches with input/output declarations, and invoice red flags.
-
Automated e‑invoicing linkage so that sales tax, withholding tax, and customs duties are tied to authenticated invoice issuers.
-
Reverse onus on taxpayers claiming substantial deductions/refunds to pre‑attach verifiable documentation.
-
National litigation cell for priority cases involving more than Rs 1 billion, with court deadlines and settlement targets.
-
Asset lien automation granting FBR the powers to freeze assets, register charges on property, and auction seized goods within 90 days.
-
Third‑party data integration (banks, utility providers, telecoms) to detect unregistered and under‑registered businesses or suspicious transactions.
✅ 10. Conclusion
The AGP’s audit sharply exposes that FBR’s enforcement, digital validation, and litigation mechanisms remain underdeveloped. Faced with recurring fraud—from inflated deductions to bogus invoices and unregistered businesses—the institution risks ongoing, deep revenue leakage.
__________________________________________________________
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With half‑billion‑rupee shortfalls recurring annually, the AGP’s 18‑step action plan outlines a clear and urgent structural reform framework. These include strengthened digital controls in IRIS and WeBOC, revitalized audit teams, litigation‑resolution potency, and integration across tax and customs systems.
Policy‑makers must treat these findings not as isolated weaknesses but as systemic warning flags. Only with swift and comprehensive adoption of AGP’s measures can FBR begin plugging the Rs 662.7 billion revenue hole—and perhaps avoid even greater losses still hidden across Pakistan’s revenue system.
Federal Revenue Leakages Exceed Rs 662 Billion per Auditor‑General’s Report
(Audit Year 2024–25, Financial Year 2023–24)
In its latest audit of the Federal Board of Revenue’s (FBR) performance for the financial year 2023–24, the Auditor‑General of Pakistan (AGP) uncovered sustained and serious revenue shortfalls totaling Rs 662.7 billion. Of this massive amount, income‑tax under‑collection alone accounted for Rs 457 billion, making it the largest single drain. Alongside, the combined slippage on sales tax and federal excise duty (FED) added another Rs 186.7 billion, bringing the cumulative federal revenue shortfall well beyond the half‑trillion‑rupee threshold.
These alarming figures reflect systemic weaknesses in FBR’s enforcement and monitoring mechanisms, particularly in areas pertaining to tax compliance, data validation, litigation management, and digital auditing infrastructure.
📊 1. Income‑Tax Shortfall – Rs 457 billion
The AGP identified eight recurring weaknesses responsible for the staggering Rs 457.1 billion in income‑tax losses:
-
Unrecovered Super Tax (Rs 167.9 billion)
Over 1,600 cases were cited where super tax was imposed but never recovered. The AGP flagged consistent follow‑up failures, noting extended delays and inertia in driving these cases to resolution, including inadequate intervention by litigation and enforcement wings. -
Inflated Deductions by Taxpayers (Rs 149.6 billion)
In 18 field offices, auditors observed that taxpayers claimed inadmissible and inflated deductions. The FBR teams in these offices failed to rigorously verify or challenge inflated expense entries, allowing significant revenue bleed. -
Assessed Demands Uncollected (Rs 62.3 billion)
These are taxes that had been officially assessed and adjudicated, yet remained uncollected. The auditors emphasize chronic inefficiency in enforcing assessments through mechanisms like attachment of assets or bank liens. -
Uncaptured Withholding Tax (Rs 45.4 billion)
Withholding taxes, primarily extracted at source from salaries, dividends, and contractor payments, went largely untracked. FBR’s information reconciliation between withholding agents and payees was deemed inadequate. -
Minimum Tax Not Realised (Rs 22.9 billion)
Taxpayers subject to minimum tax regimes did not pay in full, with no forceful recovery measures in place. The auditors pointed to sub‑par follow‑ups and deficient legal action. -
Other Contributing Factors
The remaining Rs 9 billion loss was attributed to various minor issues—delays in tax year audits, incomplete use of digital systems for filings, and insufficient cross‑verification between revenue and customs data.
Impact:
Combined, these lapses point to chronic weaknesses in FBR’s enforcement, collection follow‑ups, data validation, and inter‑departmental coordination—particularly affecting compliance and realization in high‑value taxpayers.
🔄 2. Sales Tax and Federal Excise Duty (FED) Leakages – Rs 186.7 billion
The AGP audits, which assessed select FBR field offices, identified Rs 186.7 billion in losses across sales tax and excise duty due to eight main issues:
-
Bogus Input‑Tax Credits – Rs 123.6 billion
A single strain emerged as the largest culprit: taxpayers claiming credits against invoices from suspended, black‑listed, or non‑existent suppliers—often paper or shell entities. This basically converted a refundable tax into a giveaway. -
Failure in Input‑Tax Apportionment – Rs 8.5 billion
Many businesses engaged in both taxable and exempt supplies but failed to correctly allocate input tax, resulting in excess input tax claimed for exempt supplies. -
Under‑Reporting Sales – Rs 36 billion
Dealers deliberately under‑declared sales values, attributing this to possible collusion or failure of field audit teams to cross‑check supply chain and point‑of‑sale data. -
Inadmissible Exemptions Claimed – Rs 7.5 billion
Businesses claimed exemptions to which they were not legally entitled. These included mis‑classifications, lapse in documentation requirements, or legal misinterpretation. -
Undue Input‑Tax Adjustments – Rs 5.5 billion
Adjustments in the electronic system allowed illicit downgrades of tax liabilities, with inadequate review or oversight, facilitating excess refunds or credits. -
Non‑Recovery of Penalties/Default Surcharges – Rs 3.5 billion
FBR consistently allowed the accrual of penalties and surcharges in default cases to remain on paper without initiating timely recovery. -
Unregistered Taxable Businesses – Rs 1.3 billion
Hundreds of businesses, especially in steel and retail sectors, operated without registration. This allowed unaccounted economic activity without oversight. -
Shortfall in FED Collection – Rs 788 million
Analysts flagged gaps in federal excise on products like gas, cement, and air travel—either due to underreporting or misapplication of applicable duty rates.
Systemic Issues:
Broadly, these deficiencies highlight lapses in digital invoice validation, inadequate field audits, opaque e‑filing adjustments, and weak mechanisms to detect shell or paper entities.
🚢 3. Customs Revenue Leakage – Rs 18.9 billion
In the customs domain, the AGP audit revealed Rs 18.9 billion in revenue loss, attributed primarily to four issues:
-
Confiscated Goods Not Auctioned – Rs 12.6 billion
Confiscated shipments sat idle in depots—goods never auctioned, leading to revenue opportunities lost. Logistics and auction triggers were found impaired. -
Unexported Duty‑Free Inputs – Rs 3.3 billion
Under duty‑drawback schemes, importers failed to ship finished goods abroad, forfeiting the requirement while still benefiting from duty waivers. -
Blanket Exemptions/Concessions – Rs 1.6 billion
Customs granted sweeping exemptions and concessions on various import lines, often without documented approval or clear policy basis uncovers. -
Misclassification of Imports – Rs 1.2 billion
Errors or intentional downgrades of product classifications caused significant undervaluation of goods, leading to underpaid customs duties uncovers.
Systemic Reflection:
These issues underscore flaws in post‑seizure asset disposition, weak oversight in concessional import schemes, and a lack of effective valuation enforcement.
📉 4. Nationwide Exposure “Likely Much Higher”
The AGP emphasizes that these figures are based on sample audits in selected field offices, acknowledging uncovers.
“The real nationwide exposure could be much higher.”
Such wording signals potential systemic leakage well beyond the Rs 662.7 billion quantified, possibly nearing or exceeding Rs 1 trillion annually if the patterns persist uncorrected uncovers.
🛠 5. Recommended Remedial Measures (18 Steps)
To plug these recurring leakages, the AGP recommends the following 18-step reform plan uncovers.
-
Deploy Risk‑Based Desk Audits
Extend coverage beyond physically audited taxpayers, emphasizing digital checks on transactions and returns uncovers. -
Implement “Ironclad” E‑Validation in IRIS and WeBOC
Systematically reject invalid invoices or vehicle declarations through real‑time integration and validation between sales, withholding, and customs systems. -
Form Independent Refund‑Audit Squads
Separate teams should rigorously vet every refund claimed, especially on input‑tax refunds, before issuing payments uncovers. -
Establish High‑Powered Litigation Cells
Special units within FBR should manage protracted legal cases, reducing delays, and aggressively adopt settlements or enforceable rulings uncovers. -
Reevaluate Incentive Schemes
The AGP specifically states “track‑and‑trace remains off‑track,” advocating for better adoption of digital ID‑based traceability systems uncovers. -
Cross‑Check Sales Chain vs. Supply Entities
Integrate POS, billing, and supplier registration data to detect fraud and fake invoices uncovers. -
Auction Standardization for Seized Goods
Set uniform timelines, ownership verification, and online auction mechanisms to quickly dispose of seized imports uncovers. -
Strict Monitoring of Duty‑Drawback Claims
Operate systems to verify end‑product shipments abroad before granting refund or duty draw‑back approvals uncovers. -
Enforce Rights Over Penalties and Default Surcharges
Launch enforcement including code‑based reminders, bank notices, and asset liens uncovers. -
Audit Blacklisted/Suspended Supplier Databases
Dynamically update supplier status; invoices from blacklisted entities should be auto‑blocked uncovers. -
Improved Training for Field Offices
Regular training in data validation, audit triggers, invoice review, interpretation of tax law, risk‑based filing selection, etc uncovers. -
Digital Invoice Trace‑Back Tools
Provide fields like QR codes or digital signatures to trace each invoice to the original issuing point in IRIS uncovers. -
Simplify Minimum Tax Regime Rules
Provide clarity, simplify due calculations, and benchmark filing to ensure compliance. -
Mandatory Registration Enforcement
Use trade body data, utility bills, mobile records, and field inspectors to identify unregistered businesses in sectors like steel and retail. -
Clear e‑refund Rules and Transparency
Ensure refund timelines, documentation policies, and refusal criteria are completely transparent and enforceduncovers. -
Track Super‑Tax Assigned Cases
Introduce a case‑management dashboard tracking assignment, notices, appeals, and recovery progress for each super‑tax file uncovers. -
Digitize High‑Value Asset Attachments
Pilot e‑lien filings on high‑value taxpayer assets to accelerate recovery actions. -
Mandatory Invoice Reconciliation Across Systems
Reconcile IRIS (sales tax), e‑filing (income tax), and WeBOC (customs) data, flagging inconsistencies in real time uncovers.
🔍 6. Diagnostic Analysis: Why These Measures Matter
-
Digital validation is central. Without real‑time vetting of invoices and customs declarations from blacklisted suppliers, the system invites fraud. A tightly‑integrated digital infrastructure can block fake invoices before any tax benefit accrues uncovers.
-
Litigation is costing billions. Huge tax demands lie dormant as contentious cases drag through legal processes, occasionally lingering for years. Speedier litigation resolution or settlements would unlock frozen revenue uncovers.
-
Asset recovery shortfalls. Non‑auctioned goods and uncollected taxes obscure FBR’s ability to convert authority into money. Institutionalizing digital liens and asset registers should address this uncovers.
-
Gaps in export verification. Duty‑drawback failures point to a leak‐by‐design flaw, where refunds proceed without verifying that goods truly exited the countr uncovers.
-
Weak field audit discipline. Allowing inflated expenses or unverified deductions reflects inconsistent audit standards and inadequate internal checks across regional offices uncovers.
-
Poor inter‐system synergy. The failure to cross‑verify invoice issuance, tax filings, and customs filings openly invites manipulation and undermines revenue integrity uncovers.
🎯 7. Implications for Policy and Governance
-
Revenue Mobilization Threatened
The under‑collection — upwards of 5% of total federal receipts — strains the national budget, constraining development expenditures and inducing borrowings uncovers. -
Tax Justice Undermined
Honest taxpayers are penalized implicitly when defaulters evade liabilities. This breeds resentment and warps the social contract uncovers. -
FBR Credibility Intact Threatened
Recurring AGP audits reveal cyclical non‑action. Unless corrections are proactive, this undermines public confidence and invites international criticism uncovers. -
Fiscal Discipline Imperiled
Draft Budgets contingent on projected receipts hinge precariously if revenue shortfalls remain unresolved. -
Impediments to Digitalization Gains
Federal programs aiming for automation are thwarted by lack of holistic systems and accountability uncovers.
💰 8. Illustrative Case Examples (Hypothetical)
-
A Karachi‑based auto parts importer received duty exemptions on raw materials but failed to export finished goods. Despite the unrecoverable claim of Rs 50 million, follow‑up was never initiated uncovers.
-
A Lahore‑registered retailer claimed Rs 35 million in input tax from a shell company. The invoice was auto‐validated by the system and the refund processed. FBR didn’t block the transaction. A field audit later quantified the fraud—but the money was gone uncovers.
-
In Islamabad, a large taxpayer inflated allowed deductions—travel, marketing expenses—resulting in a tax demand shortfall of Rs 250 million. While flagged, no enforcement action followed due to litigation being stuck in the tax cell.
-
In Peshawar, a steel mill failed to be registered; it generated revenues of billions of rupees yearly but paid no sales tax. The AGP estimated an exposure of Rs 100 million annually for this single mill uncovers.
📌 9. AGP’s Call to Action: Must‑Do Lists for FBR
-
Immediate roll‑out of desk audits using analytics dashboards to flag unusual deductions, mismatches with input/output declarations, and invoice red flags uncovers.
-
Automated e‑invoicing linkage so that sales tax, withholding tax, and customs duties are tied to authenticated invoice issuers uncovers.
-
Reverse onus on taxpayers claiming substantial deductions/refunds to pre‑attach verifiable documentation uncovers.
-
National litigation cell for priority cases involving more than Rs 1 billion, with court deadlines and settlement targets.
-
Asset lien automation granting FBR the powers to freeze assets, register charges on property, and auction seized goods within 90 days.
-
Third‑party data integration (banks, utility providers, telecoms) to detect unregistered and under‑registered businesses or suspicious transactions.
✅ 10. Conclusion
The AGP’s audit sharply exposes that FBR’s enforcement, digital validation, and litigation mechanisms remain underdeveloped. Faced with recurring fraud—from inflated deductions to bogus invoices and unregistered businesses—the institution risks ongoing, deep revenue leakage.
With half‑billion‑rupee shortfalls recurring annually, the AGP’s 18‑step action plan outlines a clear and urgent structural reform framework. These include strengthened digital controls in IRIS and WeBOC, revitalized audit teams, litigation‑resolution potency, and integration across tax and customs systems.
