Senate panel seeks action on tax exemptions, questions FBR over Rs154 billion textile imports

A Senate sub-committee has questioned the Federal Board of Revenue (FBR) over tax exemptions granted to industries operating in the erstwhile FATA and PATA, directing the tax authority to provide complete data on consumption certificates, tax returns and pending cases.

During a meeting chaired by Senator Saifullah Abro, the committee reviewed FBR's performance on tax evasion and examined the issuance of consumption certificates to industries operating in tax-exempt areas.

According to an FBR report, the ghee sector recorded the highest number of tax-related cases over the past six months, with 26 cases involving Rs57.586 billion. The steel sector accounted for eight cases worth Rs7.517 billion, followed by the textile sector with 11 cases involving Rs5.920 billion. The plastic industry recorded three cases worth Rs1.267 billion, while the food sector had 15 cases involving Rs1.259 billion.

Senator Saifullah Abro questioned how textile imports worth Rs154 billion brought into Pakistan under tax exemptions could have been consumed in the erstwhile FATA. He noted that the federal government already allocates around Rs100 billion annually to the region and said tax exemptions should not be misused.

FBR officials informed the committee that only Rs5.9 billion in pay orders linked to the textile imports had been encashed so far, while imports worth around Rs145 billion remain under scrutiny. They added that several businessmen had obtained stay orders from the Peshawar High Court, which directed the FBR to hear the affected parties before proceeding further.

The committee directed the FBR to submit a detailed report on the submission and encashment of pay orders, their current status and all related cases pending before the Peshawar High Court.