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National Assembly Standing Committee on Finance on Friday deliberated on the Federal Board of Revenue’s (FBR) request for expanded powers aimed at addressing significant tax evasion in major sectors.
FBR Chairman Rashid Langrial briefed the committee, pointing out that while the FBR holds monitoring authority under sales tax regulations, it lacks equivalent powers under income tax provisions. He emphasized that this legislative gap has enabled the evasion of billions of rupees in taxes across various sectors.
Citing a specific example, Langrial mentioned a hatchery in Islamabad that sells one million chicks daily, with a production cost of Rs 60 to 70 per chick. He stated that this operation alone is liable for approximately Rs 150 billion in taxes, requiring an additional Rs 30 billion in annual tax contributions. According to Langrial, about ten such units are currently under scrutiny, and the proposed powers would allow the FBR to effectively audit and access data from these entities.
Chairman FBR also drew attention to rampant tax evasion within the tobacco industry, estimating losses of approximately Rs 300 billion annually. He stressed the need for enhanced enforcement powers to effectively curb this issue.
He further noted that while recent court rulings have favored the FBR in tax-related cases, there have been complications. In one instance, a company withdrew all funds from its bank accounts before a court decision was finalized. To prevent such actions in the future, the FBR is requesting authority to preemptively freeze bank accounts involved in ongoing tax litigation.
Responding to these requests, Chairman of the Committee Syed Naveed Qamar acknowledged the importance of granting such powers but questioned the actual increase in revenue they might yield. Langrial admitted that while the measures may not completely eliminate the revenue shortfall, they would contribute to increased tax collections. He further assured the committee that the proposed powers are in line with constitutional provisions and have received approval from the federal cabinet, the Prime Minister, and the President.
Despite these assurances, Qamar expressed concern over the FBR’s legislative approach, stating that the agency had bypassed parliamentary oversight. He also questioned the Ministry of Law’s rapid approval of the ordinance.
Committee Reviews Tax Laws (Amendment) Ordinance, 2015 (IV of 2025)
Earlier in the session, the committee was given a detailed briefing by the FBR Chairman on the Tax Laws (Amendment) Ordinance, 2015 (IV of 2025). The committee discussed the urgency and context of the ordinance, voicing concern over its possible impact on various sectors of the economy. Members stressed the need to thoroughly assess any amendments to avoid unintended consequences for other industries.
The Committee Chairman underscored the importance of incorporating expert input from the Ministry of Law and Justice to refine the proposed legislation for better implementation. A representative from the ministry informed the committee that the ordinance would be presented as a bill in the current National Assembly session, after which it would be referred back to the committee for further deliberation and recommendations. The chairman assured members that the bill would be closely examined and amended where necessary.
