Islamabad: In a major enforcement action, Pakistan’s Inland Revenue authorities have arrested five individuals involved in significant sales tax fraud, including top corporate officers and a notorious fraudster, as part of a national crackdown on tax evasion announced earlier this month.
According to Press Information Department, the arrests, made on October 14, 2024, targeted individuals across various regions, including CFOs of prominent manufacturing and textile units in Lahore and Faisalabad. These actions stem from a coordinated effort announced during a press conference on October 10 by the Finance Minister, the Chairman of the Federal Board of Revenue (FBR), and the Director General of Intelligence and Investigation, Inland Revenue.
The operations led to the apprehension of a leading fraudster who created multiple dummy businesses to facilitate tax evasion and four top executives implicated in fraudulent activities resulting in billions in lost sales tax revenue to the national exchequer. Notably, the Hyderabad and Lahore directorates collaborated to arrest the CFO and Purchase Officer of a major Lahore-based battery manufacturer for their involvement in a sales tax fraud scheme centered on fake input tax claims on lead. This alone accounted for a loss of over a billion PKR.
Similarly, Faisalabad’s intelligence team arrested CFOs from two sister textile companies for complicity in a scheme involving fake claims on coal, costing the exchequer hundreds of millions of PKR. In addition to these arrests, Taswar Shahid, a key member of a criminal network operating fake units for generating fraudulent sales tax inputs, was detained after his pre-arrest bail was rejected by a court on the same day.
These rigorous enforcement measures reflect FBR’s intensified campaign to dismantle organized tax fraud operations and improve tax compliance nationwide, signaling a significant shift in the government’s approach to tackling financial crimes that undercut public fiscal health.