Karachi, August 2, 2025 – The Federal Board of Revenue (FBR) has taken notice of growing concerns from the business community and has begun closely monitoring the conduct of tax officials, especially in cases where enforcement powers are being exercised.
Under the newly introduced Section 37A of the Sales Tax Act, 1990—added through the Finance Act 2025—FBR officials now have broad authority to investigate tax fraud. While the goal is to curb widespread sales tax evasion, the business community fears these powers may be misused. Their concerns led to a nationwide strike on July 19, 2025, protesting what they called harsh and unchecked enforcement measures.
Another provision, Section 40B, which already exists in the Sales Tax Act, allows FBR officials to be deputed directly to business premises. This gives them the authority to check stock, purchases, and supplies to uncover tax evasion. However, many traders allege that tax officials often exceed their powers, leading to undue harassment and pressure tactics.
In response to these protests, the FBR has set up two dedicated committees to handle complaints of power abuse by tax officials. These committees are expected to provide a formal channel for taxpayers to report misconduct.
FBR officials admit that sales tax fraud is a major issue, costing the country billions in revenue. They emphasize that strict oversight is necessary. However, the challenge lies in balancing enforcement with fairness, ensuring FBR officials act within legal limits while safeguarding taxpayer rights.