The Federal Board of Revenue’s (FBR) Intelligence and Investigative Department has arrested five individuals involved in a massive sales tax fraud scheme, which has resulted in billions of rupees in losses to the national exchequer.Â
This marks a significant step in the FBR’s intensified efforts to clamp down on organised tax fraud networks.
The arrests come as part of a broader enforcement initiative aimed at curbing the widespread issuance of fake and flying invoices.Â
According to an official statement, regional Directorates of Intelligence & Investigations Inland Revenue carried out operations across the country, apprehending five individuals on Monday. Among them were a leading fraudster and four CFOs implicated in sales tax fraud linked to dummy businesses.Â
In Hyderabad, the directorate arrested the CFO and a purchase officer of a major Lahore-based battery manufacturer, accused of helping the company fraudulently claim over Rs1 billion in input tax on lead.Â
Meanwhile, in Faisalabad, the directorate arrested the CFOs of two related textile companies involved in fraudulent claims of input tax on coal. The fraudulent activities, involving a network of criminals, have resulted in hundreds of millions of rupees in losses to the treasury.
Additionally, the court denied pre-arrest bail to a key suspect, Taswar Shahid, named in several FIRs. Shahid, a prominent member of the fraud network, was arrested outside the courtroom.Â
He has been accused of running fake companies to generate fraudulent sales tax input, benefiting end users and causing significant financial damage to the government.
The FBR’s crackdown on sales tax fraud is part of its broader efforts to improve tax compliance and address large-scale financial crimes.
FBR Chairman Rashid Mahmood Langrial recently disclosed that over Rs3 trillion in sales tax fraud occurs annually, with chief financial officers (CFOs) of large corporations often playing a key role in the schemes.
