Islamabad: In a significant enforcement action, authorities have apprehended several key individuals involved in a massive sales tax fraud, following a nationwide crackdown. The arrests, which included top financial officers of major companies, were made as part of a concerted effort by the Federal Board of Revenue (FBR) to combat tax evasion and recover billions in lost revenue.

According to Federal Board of Revenue, the crackdown targeted beneficiaries of fake or fraudulent sales tax invoices and their chief financial officers (CFOs) involved in tax malpractices. Five arrests were made across the country on October 14, 2024, including a prominent fraudster who created chains of dummy businesses and four CFOs of major firms. The actions were taken following a press conference on October 10, 2024, which outlined the upcoming enforcement measures.

In one detailed operation, the Directorate of Intelligence and Investigation-Inland Revenue in Hyderabad arrested the CFO and Purchase Officer of a leading Lahore-based battery manufacturer. They were charged with abetting and colluding in sales tax fraud by claiming fake input tax credits. This particular case, supported by the Directorate in Lahore, involved over a billion PKR in revenue losses to the national exchequer.

Meanwhile, in Faisalabad, the CFOs of two sister textile companies were detained for similar charges involving fake tax claims on coal purchases. This operation revealed that the fraud ran into hundreds of millions of PKR. Additionally, the pre-arrest bail of Taswar Shahid, a key figure in several fraud cases, was denied, leading to his arrest outside the courtroom. He was identified as a major player in a network generating fraudulent sales tax inputs, causing significant financial damage to the state.

These arrests mark a pivotal step in the FBR’s broader strategy to enhance tax compliance and address systemic issues within the tax system.