Islamabad, October 14, 2024 – In an aggressive push against tax evasion, the Federal Board of Revenue (FBR) has arrested several Chief Financial Officers (CFOs) linked to large-scale sales tax fraud.
The arrests are part of a nationwide operation led by the Directorate of Intelligence and Investigation (I&I) of Inland Revenue (IR), targeting individuals and companies suspected of causing colossal losses to the national exchequer through tax malpractices.
This development comes after an announcement made on October 10, 2024, by Finance Minister, Chairman of FBR, and Director General of Intelligence & Investigation. During the press conference, the officials declared their intention to launch a comprehensive crackdown on businesses engaged in fraudulent activities, particularly those utilizing fake or “flying” invoices to evade taxes. The crackdown, which has now moved into full force, has already led to the arrest of five high-profile suspects, including one of the leading fraudsters accused of creating dummy companies and four CFOs from major corporations, all implicated in sales tax fraud amounting to billions of rupees.
In a major operation conducted by the Directorate of Intelligence & Investigation-Inland Revenue in Hyderabad, the CFO and Purchase Officer of a prominent Lahore-based battery manufacturer were taken into custody. The accused are alleged to have collaborated in a fraudulent scheme that falsely claimed input tax on lead, leading to over a billion rupees in tax losses. The Hyderabad team, with assistance from the Lahore office, executed the arrests after filing a First Information Report (FIR) detailing the massive scale of the tax fraud.
Meanwhile, another successful raid was conducted by the Directorate in Faisalabad, where CFOs of two sister concerns associated with a leading textile unit were arrested. These individuals are accused of abetting a tax fraud scheme that involved claiming fake input tax on coal purchases. This fraudulent activity is believed to have caused hundreds of millions of rupees in revenue losses. FIRs have already been registered against these suspects and other beneficiaries involved in this complex web of deceit.
The crackdown intensified with the arrest of Taswar Shahid, a key figure implicated in numerous FIRs related to generating fake sales tax inputs. Shahid, whose pre-arrest bail was rejected by the court earlier today, was apprehended outside the courtroom. He is considered a linchpin in a well-organized gang that operated numerous fake companies, funneling billions of rupees in fraudulent tax benefits to end-user businesses. His arrest represents a significant victory in FBR’s battle against this entrenched tax evasion network.
The arrests come in the context of FBR’s broader strategy to curb tax fraud and improve compliance with the nation’s tax laws. Sales tax fraud, particularly involving fake invoices, has been a longstanding problem, contributing to significant revenue shortfalls. This latest operation reflects the agency’s heightened resolve to eliminate corrupt practices that have eroded public trust and drained national resources.
According to FBR officials, the individuals arrested are part of a sophisticated scheme designed to manipulate the tax system for financial gain. The CFOs and their accomplices exploited loopholes and falsified tax records, effectively evading billions of rupees in sales tax. These losses directly impact the country’s ability to fund essential public services and infrastructure development.
The FBR has pledged to continue its efforts to dismantle these criminal networks. In a statement, the FBR highlighted that it would leave no stone unturned in its mission to enforce compliance and ensure that all businesses and individuals pay their fair share of taxes. These enforcement measures are seen as a crucial step toward restoring fiscal discipline and reinforcing the credibility of the tax collection system.
As the crackdown continues, further arrests and investigations are expected, with FBR emphasizing that no individual or entity involved in tax fraud will be spared. This initiative signals the agency’s determination to hold accountable those who flout the law, ensuring that tax revenue is properly collected and utilized for the country’s development.
The nation now watches closely as the FBR intensifies its battle against one of the largest tax fraud syndicates in recent memory.