FBR under-realised Rs117.8bn in super tax, Auditor-General tells Parliament

ISLAMABAD: The Auditor General of Pakistan’s report for 2025-26 has identified Rs117.8 billion in under-realised super tax at the Federal Board of Revenue, along with billions of rupees in recoveries, unpaid dues, overbilling, unaudited accounts and weak controls across federal departments and public sector entities.

Finance Minister Muhammad Aurangzeb laid the report before the National Assembly on Wednesday. 

The findings are audit observations and include departmental responses presented during Departmental Accounts Committee meetings. The report will now be examined by the Public Accounts Committee (PAC) of the National Assembly.

Auditors said the Federal Board of Revenue under-realised Rs117.8 billion in super tax alone. They also pointed to other irregularities, including unrecovered duties.

In the Petroleum Division, auditors identified recoveries of about Rs117 billion and a disputed gas subsidy balance running into hundreds of billions of rupees.

The report said electricity distribution companies, including Hesco, Lesco and Fesco, were operating with unaudited accounts for 2023-25 and without internal audits. It also pointed to withheld subsidy claims and stalled transmission projects.

The Pakistan Telecommunication Authority was criticised for not bringing data centres under its licensing regime and for not penalising Ufone’s operator despite established cases of illegal SIM activation.

The National Telecommunication Corporation was found to be serving private clients despite its government-only mandate.

Pakistan Railways received a qualified audit opinion. Auditors also flagged encroachment of more than 1,500 kanals of prime railway land.

The National Highway Authority was cited for revenue leakages from tolls, right of way and fines, along with spending beyond sanctioned limits.

The Capital Development Authority had not prepared annual financial statements for the years under audit. Auditors also pointed to weaknesses in its land directorate, which they linked to the alteration of compensation instruments.

Among Wapda projects, the Dasu Hydropower Scheme recorded a 257 per cent cost increase. The 969MW Neelum-Jhelum plant has remained offline since May 2024 after tunnel collapses, while related inquiries remain incomplete.

At the Benazir Income Support Programme, auditors warned that weak data controls had resulted in ineligible beneficiaries and duplicate payments.

The Defence Services used almost their entire Rs2.2 trillion allocation and received an otherwise clean audit opinion. However, the report repeated concerns over the failure to reconcile military bank accounts with banks and the accountant general.

Defence store losses for the year stood at about Rs29.8 million.

For the National Disaster Management Authority, auditors raised 10 findings, four of them classified as critical. These included about Rs952 million in bank balances omitted from accounts, more than Rs1 billion in undisclosed Sindh sales tax liabilities linked to two Karachi stormwater drain contracts, Rs752 million in misclassified expenditure and about Rs10.8 billion in relief stock held without any inventory-tracking system.

The report also noted that all 20 findings from the previous year relating to the National Disaster Management Authority remained unresolved.

The audit highlighted cumulative losses of Rs21.34 billion at the Pakistan Agricultural Storage and Services Corporation between 2021 and 2025, with financing costs exceeding revenue.

It said receivables of Rs257.128 billion for wheat supplies remained unrecovered from federal and provincial agencies. The Auditor General of Pakistan estimated that a 50 percent recovery rate could save Rs22.5 billion annually in financing costs.

The report also flagged overbilling of Rs32.26 billion to the federal government through inflated strategic reserve costs, incorrect incidental charges and unauthorised mark-up claims.

Auditors said the losses and unrecovered receivables at the Pakistan Agricultural Storage and Services Corporation reflected fiscal stress that could affect its food security mandate.