Karachi, January 12, 2025 – The Large Taxpayers Office (LTO) Karachi has established the Inland Revenue Enforcement Network (IREN) to address tax evasion within its jurisdiction. This initiative aligns with directives issued by the Federal Board of Revenue (FBR), which outlined the scope and functions of the IREN network and the enforcement units within field formations possessing legal territorial or tax jurisdiction over specific cases.
According to the FBR’s Order dated September 19, 2019, the roles of the concerned enforcement units and the IREN Squad are clearly defined:
For Concerned Field Office:
“All enforcement activities shall be conducted by the concerned enforcement unit (RTO/LTO/Directorate) holding legal territorial or tax jurisdiction in accordance with the provisions of the Sales Tax Act, 1990, Federal Excise Act, 2005, and related rules and procedures. Post-enforcement actions shall also be conducted by the concerned enforcement units/field formations as per law.”
For IREN Unit/Squad:
“Primarily, this unit/squad will be responsible for the following functions and operations:
1. Educating and facilitating taxpayers, particularly traders, to raise awareness about the legal and penal consequences of engaging in illicit activities, such as tax evasion and the illegal trade of specified goods, including tobacco and cigarettes.
2. Conducting raids, searches, and seizures of premises or storage facilities involved in the sale or distribution of non-tax-paid goods, with confiscation carried out where applicable under the law.
3. Deploying mobile squads to inspect vehicles reportedly transporting illegal or tax-evaded goods.
4. Monitoring major distributors of specified goods, including local cigarette brands originating from manufacturers in Khyber Pakhtunkhwa (KPK) and Azad Jammu and Kashmir (AJK).
5. Establishing close coordination with regional enforcement hubs for effective and coordinated actions.
6. Initiating post-enforcement proceedings, including criminal prosecution against individuals involved in these illegal activities.”
The LTO Karachi emphasized that all enforcement and post-enforcement actions will remain the responsibility of the concerned enforcement units within the relevant field formations. To enhance transparency, the LTO proposed that in cases involving confiscated goods due to counterfeit tax stamps, the re-verification of these stamps should be conducted jointly by the IREN squad and the relevant enforcement units.
This joint verification approach aims to ensure accountability and fairness while tackling tax evasion, particularly in sectors like tobacco, where illegal trade has significant economic repercussions. The LTO Karachi’s initiative underscores its commitment to combating tax evasion and promoting compliance with tax laws.