Islamabad: A recent meeting of the Sub-Committee of the Senate Standing Committee on Interior and Narcotics, led by Senator Saifullah Abro, addressed significant issues surrounding tax collection in the tobacco sector, smuggling, and enforcement mechanisms.

According to Senate of Pakistan, the committee received comprehensive briefings from the Federal Board of Revenue (FBR) and the Federal Investigation Agency (FIA). Concerns were raised regarding tax transparency, particularly the FBR’s failure to provide detailed records of tax-exempt industries and tobacco companies, which impedes the assessment of potential tax evasion.

The FBR informed the committee that there are 35 tobacco companies operating in the country, with a request pending with the Ministry of Law and Justice to determine if their taxation records could be shared with the committee. The FBR also noted that factories in previously tax-exempt areas have lost their income tax exemptions as of July 2026. Despite Cabinet-approved annual release of tax data for higher taxpayers, the committee demanded comprehensive taxpayer data from 2021 onwards for the tobacco industry.

In addition to tobacco, the committee discussed tea imports, questioning the legitimacy of tea imports worth Rs62 billion for the former FATA region, suggesting possible discrepancies in reported consumption. FIA officials committed to joint efforts with the FBR to address smuggling in tax-exempt areas, with plans for Zonal Directors of Peshawar and Kohat to conduct inspections, augmented by two additional officers.

The FBR argued that taxation matters fall under the Senate Standing Committee on Finance, but Senator Abro insisted on the committee’s oversight responsibilities. He expressed dissatisfaction with the FBR’s limited data sharing, while Senator Dilawar Khan criticized the FBR’s tax administration and accountability, alleging misinformation given to Prime Minister Shehbaz Sharif and other officials.

The committee was informed of the proposal to impose an 18 percent sales tax in tax-exempt areas, while anti-smuggling operations had reportedly recovered Rs1.5 billion in the past year. Senator Talha Mahmood cautioned against direct FIA interventions in industrial areas, advocating for data acquisition through the FBR instead.

The committee concluded by directing the FIA to continue its investigations into the tobacco industry, emphasizing the need for transparency, accountability, and effective enforcement to prevent tax evasion. The meeting was attended by Senators Talha Mahmood, Dilawar Khan, and Haji Hadiyatullah Khan.