Islamabad: The audit report issued by the Directorate
General Audit Inland Revenue and Customs for the financial year 2024-25
identified tax irregularities worth billions of rupees, under-collection and
serious shortcomings in the internal control system.
According to the audit report, a recovery of Rs 323.34
billion was identified due to irregularities; however, only Rs 43 billion could
be recovered during January to December 2025.
The report states that a risk-based audit of the FBR’s
income and expenditure was conducted, in which income tax, sales tax, federal
excise duty, customs duty and sales tax on services in Islamabad were reviewed.
According to the audit, the FBR’s internal control system
was found to be weak and ineffective, while several irregularities, including
under-reporting of revenues, under-collection of sales tax, federal excise
duty, default surcharge and fines were revealed.
According to the report, 18 field offices did not collect a minimum
tax of Rs 15.29 billion in 601 cases, while 19 field offices did not collect
super tax of Rs 117.77 billion in 527 cases, and 16 field offices
under-collected income tax of Rs 24 billion in 276 cases due to inadmissible
expenditure claims. In other cases, under-collection of billions of rupees was
also revealed due to incorrect determination of taxable income, incorrect
allocation of expenses and input tax.
In the sales tax sector, irregularities of Rs 41.78 billion
were reported in 159 cases due to lack of monitoring of input tax credit of
blacklisted taxpayers, while 20 field offices did not collect sales tax of Rs
13.3 billion in 870 cases.
According to the audit report, due to misclassification and
undervaluation of imported goods in the customs duty sector, revenue of Rs 3.56
billion was short-collected in 9,831 cases. Similarly, due to unacceptable duty
and tax exemptions, non-recovery of surcharge on delayed removal of goods from
the warehouse and non-sale of seized goods, the national exchequer also
suffered a loss of billions of rupees.
The audit report recommends that the FBR make its internal
control system effective, establish a permanent monitoring system to prevent
irregularities, link taxpayer profiles with the return filing system and make
risk-based desk audit more effective for accurate determination of minimum tax
and super tax.
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