PAC seeks Rs3.4bn tax recovery from 195 cotton mills, questions ministry’s decade-long inaction

The Public Accounts Committee (PAC) revealed that Rs3.4 billion in taxes remained unrecovered from 195 cotton mills across Punjab, Sindh, Khyber Pakhtunkhwa, and Balochistan between 2012 and 2023, prompting sharp criticism of the Ministry of National Food Security and Research for failing to act for over a decade, Business Recorder reported. 

Chairing the meeting, Junaid Akbar directed the ministry to ensure full recovery of the outstanding amount by June. The food security secretary informed the committee that many of the mills had challenged the tax in court, but settlements were now being negotiated. He expressed hope that the full amount would be recovered in the coming months.

PAC members, however, expressed dissatisfaction with the ministry’s handling of the matter. Senator Saleem Mandviwala questioned why the tax had not been collected earlier. 

In response, the secretary admitted the absence of a defined mechanism for upfront recovery, a gap that contributed to the prolonged delay.

The committee also raised concerns about the overall condition of the cotton sector. PAC member Aamir Dogar lamented its decline, asking what steps were being taken to address the issue. 

The secretary responded that the Central Cotton Committee (CCC) was being merged into the Pakistan Agricultural Research Council (PARC) and that revival efforts were underway under a special committee formed by the prime minister.

The session also highlighted issues of administrative instability within the ministry. PAC member Hussain Tariq noted that four secretaries had been changed in just eight months, disrupting continuity. He urged the committee to recommend that the government avoid frequent top-level bureaucratic transfers. Shazia Marri supported the proposal, and the committee agreed to send a formal letter to the prime minister.

In addition, the committee examined financial losses reported by the Auditor General. It was informed that the Central Cotton Committee incurred a Rs52.3 million loss after failing to invest Rs90 million in a timely manner. The secretary said the funds had since been invested, but the PAC directed the ministry to submit verification of the investment within 15 days.

The committee was further told that the CCC had hired 155 employees without approval from the Ministry of Finance, resulting in a Rs21.6 million loss. The secretary said the workers had been hired on seasonal 89-day contracts and had now been terminated. Responding to PAC member Aminul Haque’s query on the delay, the secretary clarified that the employment had not been continuous over the years.