News Detail
Event Title: Senator Saifullah Abro, Convener Sub-Committee of The Senate Standing Committee on Interior and Narcotics Control presiding over a meeting of the committee at Parliament House, Islamabad
Event Date: 2026-07-06
FBR Fails to Provide Records on Tax-Exempt Industries and Tobacco Companies, Hindering Tax Evasion Assessment
Islamabad ( 06-07-2926) : A meeting of the Sub-Committee of the Senate Standing Committee on Interior and Narcotics was held under the Convenership of Senator Saifullah Abro to review tax collection of tobacco sector, smuggling-related issues and enforcement mechanisms in the tobacco sector.
The committee received detailed briefings from officials of the Federal Board of Revenue (FBR) and the Federal Investigation Agency (FIA), while members raised concerns over tax transparency.
At the outset, the committee was briefed on tax collection from the tobacco industry. FBR officials informed the meeting that there are 35 tobacco companies operating in the country with multiple brands. Officials further stated that a letter has been sent to the Ministry of Law and Justice to obtain the opinion whether or not the taxation records of tobacco companies be shared with the committee.
The committee was informed that factories operating in the tax exempted areas previously enjoyed income tax exemptions, which have now ended from July 2026.
The FBR informed the committee that, following Cabinet approval, tax-related data is released annually only by the higher tax payers However, the committee directed the FBR to provide complete data of taxpayers from 2021 to date related to tobacco industry.
Convener Senator Saifullah Abro stressed that the tax net should be expanded to include the maximum number of eligible taxpayers. He reiterated that broadening the tax base was essential for improving national revenue collection.
The committee also discussed tea imports. Senator Saifullah Abro observed that there are 52 companies importing tea into Pakistan. Referring to imports destined for the former FATA region, he questioned whether tea worth Rs62 billion imported annually for the area reflected actual consumption, asking, "Do they really consume this much tea?"
FIA officials informed the committee that they would work jointly with the FBR in tax-exempt areas to address smuggling and related issues.
In response to a question from the Convener regarding visits to tax-exempt regions, FIA officials said that the Zonal Directors of Peshawar and Kohat would visit those areas.
Senator Saifullah Abro directed that two additional officers be included in the inspection team.
FBR officials maintained that taxation matters fall under the jurisdiction of the Senate Standing Committee on Finance rather than the Interior Committee. They stated that the present subcommittee could examine issues related to smuggling by companies, as reflected in its agenda. Senator Saifullah Abro responded that customs-related matters are linked to the FBR and said the committee could not be restricted from performing its oversight responsibilities.
The Convener demanded that the FBR provide complete data of tobacco company taxpayers to the committee. When FBR officials responded that only data of the highest taxpayers is shared after Cabinet approval, Senator Saifullah Abro expressed strong dissatisfaction.
While discussing the investigation matter of the 2828 cartons of cigarettes the convenor emphasised that the FIA was independently conducting its investigation and that the committee bore no responsibility for that process.
Reaffirming the committee's authority, he said it would continue to perform its constitutional responsibilities without external interference.
Referring to the discussion, he further said reiterated the Prime Minister's public statement that tax evasion worth one billion dollars had taken place, Senator Abro questioned whether the Prime Minister had been provided with incorrect information before the advertisement was issued. He also noted that relevant SROs are amended every year and urged the FBR to fix its internal system, warning that continued institutional failures would undermine public confidence. Citing the theft of 2,828 cartons of cigarettes, he remarked that no meaningful action had been taken despite the scale of the incident.
During the discussion, Senator Dilawar Khan launched a strong criticism of the FBR's tax administration and accountability mechanisms. He alleged that incorrect information had been conveyed to Prime Minister Shehbaz Sharif, Federal Information Minister Atta Tarar and Defence Minister Khawaja Asif, questioning why the country's population of 260 million had been misled.
Senator Dilawar khan referred to the reported theft of goods worth Rs300 million from a government warehouse, for which an FIR had been registered.
Senator Dilawar Khan further questioned why an officer allegedly under investigation on theft of 2828 cartons case had been granted leave.
FBR officials informed the committee that significant measures had been introduced over the past year to curb tax evasion. They further stated that the FBR itself wanted action against officers responsible for theft and revenue losses, while emphasising that all investigations and proceedings must be conducted strictly in accordance with the law.
The FBR also informed the committee that it had proposed imposing 18 percent sales tax in tax-exempt areas through amendments to the relevant SROs. Officials further stated that anti-smuggling operations had resulted in recoveries of Rs1.5 billion during the past year.
Senator Talha Mahmood cautioned that sending FIA teams directly into industrial areas could create difficulties for businesses. He suggested that the FIA should obtain the required data from the FBR instead of conducting extensive field visits. He also observed that flawed tax policies were adversely affecting the business community and described the current federal budget as damaging for the public and the economy.
At the conclusion of the meeting, the committee directed the FIA to continue examining matters related to the tobacco industry falling within its jurisdiction, particularly those concerning smuggling and enforcement. The committee also reiterated its demand for complete taxpayer data from 2021 onwards related to tobacco companies and emphasised that transparency, institutional accountability and effective enforcement were essential to preventing tax evasion and protecting the national exchequer.
The meeting was attended by Senator Talha Mahmood, Dilawar Khan and Senator Haji Hadiyatullah Khan.