Print Print edition: 2025-09-16

Financial, procedural irregularities: AGP asks FBR to recover Rs925bn from taxpayers

Published September 16, 2025 Updated September 16, 2025 08:43am

3 min

By Sohail Sarfraz

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ISLAMABAD: Auditor General of Pakistan (AGP) has directed the Federal Board of Revenue (FBR) to recover an amount of over Rs925 billion from taxpayers after detection of financial and procedural irregularities within Inland Revenue and customs departments during 2024-25.

The audit was conducted during 2024-25 and as a result a recovery of Rs 925,841.59 million was pointed out. The recovery effected from January to December 2024 was Rs 19,265.05 million. There was a 25 percent increase in the amount of recovery pointed out as compared to the previous fiscal year.

The overall audit findings highlighted systemic weakness in audit of tax assessments leading to leakage and less collection of tax from existing taxpayers. There was a weak litigation mechanism due to which potential tax revenue of huge amounts continue to remain blocked in court cases, it said.

Recovery of taxes: AGP unearths Rs737.868bn irregularities

The continued lapses in efforts at effective broadening of tax base, and gaps in implementation of initiatives like track and trace system, have limited the envisaged benefits. Furthermore, enhanced number of taxpayers has not necessarily translated into an expansion in the revenue base.

The audit pointed out that weakly designed and implemented initiatives, like the tax amnesty and tax incentive schemes, did not yield the desired results and suffered abuse due to irregularities.

The audit detected claim of tax credit after due date of registration for incentive scheme amounting to Rs 3,882.61 million and claim of tax credit beyond stipulated period of five years of Rs 2,461.47 million.

Potential loss of revenue due to non-compliance of conditions of Rule 4 & Section 100D, pertaining to real estate sector, by builders and developers of Rs 8,385.75 million.

Irregular/ inadmissible tax credit allowed under Section 236K to purchaser/ transferees of property on fake NTN/ CNICs amounting to Rs 557.77 million.

Non-recovery of sales tax from blacklisted persons in the steel sector amounting to Rs 512.01 million, the audit report said.

Inadmissible adjustment of input tax on goods and services in steel sector was amounting to Rs 249.78 million.

In case of income tax, the audit report detected that that 22 field offices of FBR did not realize or short-realized minimum tax, amounting to Rs 22,874.66 million in 1652 cases.

A 20 field offices of FBR did not realize super tax amounting to Rs 167,887.87 million in 1,026 cases and 18 field offices of FBR short-realized income tax due to claims of inadmissible expenses amounting to Rs 149,571.28 million in 1,084 cases.

Total 19 field offices of FBR did not recover withholding tax of Rs 45,386.45million in 1344 cases and 16 field offices of FBR did not recover tax demands amounting to Rs 62,318.02 million in 1571 cases.

A total of 19 field offices of FBR sanctioned inadmissible adjustment/claim of refund amounting to Rs 6,795.41 million in 817 cases.

A total of 6 field offices of FBR short-realized tax due to non-apportionment of expenses amounting to Rs 2,253.86 million in 15 cases.

A total of 19 field offices of FBR did not monitor inadmissible adjustment of input tax credit on invoices of suspended/blacklisted taxpayers/fake invoices amounting to Rs 123,585.02 million in 375 cases.

A total of 10 field offices of FBR short-realized sales tax due to non-apportionment of input tax amounting to Rs 8,539.37 million in 196 cases.

A total of 15 field offices of FBR did not realize sales tax amounting to Rs 35,974.73 million due to concealment of sales by taxpayers in 992 Cases.

A total of 17 field offices of FBR did not prevent loss of revenue due to inadmissible exemptions of sales tax amounting to Rs 7,481.09 million in 508 cases.

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