LAHORE: Lapses by officers of the Federal Board of Revenue (FBR) in granting tax exemptions and concessions have resulted in a loss of Rs1,556.52 million to the national exchequer, according to an audit report.
The Auditor General of Pakistan’s (AGP) report for fiscal years 2022–23 and 2023–24 revealed that 16 FBR field offices approved exemptions and concessions in 1,628 cases involving duties and taxes on various goods, including PCB boards, scientific equipment, edible oil, and pharmaceutical items. These goods did not qualify for such relief, leading to inadmissible exemptions and significant revenue loss.
The audit noted that these irregularities were pointed out to the concerned departments between February and November 2024. In response, the management stated that recoveries amounting to Rs253.84 million were under process, Rs250.13 million were under scrutiny, Rs4.91 million were pending adjudication, while cases involving Rs1,041.25 million were pending before courts of law. Additionally, the management contested Rs6.39 million, claiming exemptions were granted under relevant schedules and Statutory Regulatory Orders (SROs).
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However, the audit rejected this explanation, asserting that the imported goods were not listed in the applicable exemption schedules and were therefore not eligible for tax relief.
The Departmental Accounts Committee (DAC), in meetings held in August and December 2024 and January 2025, directed the FBR to expedite recoveries, pursue adjudication and court cases, submit comprehensive replies for cases under scrutiny, and have their positions verified by audit. Despite these directives, no further progress was reported by the time the audit report was finalized.
The AGP recommended the integration of artificial intelligence into the WeBOC system to prevent inadmissible claims of tax exemptions and concessions, along with fixing responsibility on the officials found at fault.
The report further highlighted that similar irregularities had been reported in audit reports for the years 2019–20, 2020–21, 2021–22, 2022–23, and 2023–24, involving a cumulative financial impact of Rs15,000.28 million. The continued recurrence of this issue, the report observed, is a matter of serious concern.
Copyright Business Recorder, 2026
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