Islamabad, February 14, 2025 – The Federal Board of Revenue (FBR) has taken decisive action against tax fraud by sealing a prominent sugar mill in interior of Sindh, following allegations of large-scale tax evasion and manipulation of the track and trace system, sources reported on Friday.
According to reliable sources, an Inland Revenue team, acting on specific intelligence, conducted a raid on the sugar mill located in the interior of Sindh. The investigation revealed deliberate bypassing of the FBR’s track and trace system, designed to monitor production and ensure accurate tax payments. It was discovered that the mill was reusing previously used sugar bags, applying counterfeit stamps, and thereby concealing taxable production and sales.
The track and trace system, implemented by the FBR to enhance transparency in the sugar industry, requires each bag of sugar to be marked with a unique stamp. However, the raid uncovered numerous bags bearing fake stamps, suggesting an organized effort to evade taxes. By flouting the system, the mill allegedly concealed significant quantities of sugar production, resulting in substantial revenue losses for the national exchequer.
“This act of tax evasion not only undermines the integrity of our fiscal system but also deprives the government of much-needed revenue,” said an FBR official, who requested anonymity. “We are committed to curbing such malpractices to ensure a level playing field for compliant businesses.”
The FBR estimates an annual tax gap of approximately Rs 60 billion in the sugar sector, with a significant portion, nearly one-quarter, attributed to mills operating in Sindh. This latest enforcement action underscores the FBR’s resolve to tighten regulatory controls and hold violators accountable.
Further investigations are underway, and sources indicate that similar raids are imminent, with the potential sealing of eight to ten more sugar mills across the country in the coming days. The FBR has reiterated its commitment to combating tax evasion through stringent monitoring, robust enforcement actions, and enhanced use of technological tools like the track and trace system.
The FBR’s recent actions serve as a stark reminder to businesses regarding the importance of tax compliance. Authorities have vowed to continue their crackdown until the sugar industry’s tax obligations are fully met and the sector operates within the legal framework.