Tax fraudsters: Punishments will be reassessed: Aurangzeb
He assured this to the Senate Standing Committee on Finance during the review of the Finance Bill 2025-26.
The committee alongside the federal minister for finance and revenue said that he will inform the prime minister of the committee's recommendations regarding this legislation. The committee believed that implementation of recommendations will make the real difference.
Arrest for tax fraud: Senate panel for defining a threshold
The committee headed by Senator SaleemMandviwalla adopted the revised Section 37A (power to inquire and investigate offences warranting prosecution under this Act) and Section 37AA (powers to arrest) as proposed by Senator Farooq H Naek.
The revised draft of the said sections, prepared by Senator Naek, was read by FBR Member Inland Revenue (Policy) before the committee. Committee members were of the view that the punishment of 10 years imprisonment to the persons committing tax fraud is very harsh and needs to be reduced. The committee proposed reduction in imprisonment period from 10 to five years.
Some committee members also proposed reduction in fine from Rs10million to Rs5 million.
The committee also proposed that the tax fraud should be a bailable offence under the Sales Tax Act. The purpose of the FBR is to focus on recovery from taxpayer and even two years imprisonment is more than enough.
On the issue of 'Offences, Penalties, and Punishment on Tax Fraud,' Senator Farooq H Naek proposed multiple legal refinements, including reducing penalties for tax fraud from Rs10 million to Rs5 million, reducing the sentence from 10 years to five years, requiring the issuance of three separate notices before prosecution, mandating the High Court to decide tax appeals within 60 days and separating inquiry, investigation, and court trial phases.
Senator Naekemphasised that a two-year sentence is already harsh for a businessman.
Ten years is excessive.
Penalties must be proportionate and not politicised, he added.
Echoing this sentiment, Senator ShibliFaraz said that the tax laws must not be used for political victimisation.
The committee appreciated the valuable input of Senator Naek who through his extensive experience in legislation guided the committee clause by clause in the language and legal framework of the bill.
The committee also rejected the proposal for collecting 100 percent penalty of tax loss and default surcharge from a person, already arrested under tax fraud. Under the proposed law, any person who commits tax fraud, shall be liable to imprisonment for a term which may extend to ten years or with fine which mayextend to Rs10 million or with both and shall also be liable to pay the amount equal to the loss of tax caused including onehundred percent penalty of tax loss and default surcharge.
Copyright Business Recorder, 2025
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
8 hours ago
- Business Recorder
Biometric verification of registered persons: LTBA urges FBR, Nadra to bring in secure mobile app
ISLAMABAD: The Federal Board of Revenue (FBR) and the National Database and Registration Authority (Nadra) should jointly implement a secure mobile application for biometric verification of sales tax registered persons. According to a letter of the Lahore Tax Bar Association (LTBA) to the FBR Chairman, the association highlighted major challenges faced by certain sales taxpayers under the current biometric verification system and proposed a digital solution aligned with FBR's commitment to facilitation and innovation. Presently, biometric verification for sales tax registration and annually bio metric which required in terms of SRO 350(1)/2024 is conducted exclusively through Nadra's physical infrastructure. While this may suffice for most residents, it poses considerable challenges for the following categories of taxpayers: (I); Individuals temporarily residing or travelling abroad. (2); Taxpayers located in remote or underdeveloped areas. (3); Elderly or physically challenged individuals who cannot easily access the Nadra facilities. Due to the unavailability of a remote verification mechanism, these taxpayers are unable to complete their sales tax registration and annually biometric which required in tarns of SRO 350(1)/2024 dated 07.03.2025, despite their willingness to comply with legal requirements. This creates unnecessary delays, hampers business operations, filing of sales tax returns and discourages potential entrants into the tax system. Key challenges included no Remote Option for Overseas Taxpayers and delays in Registration Activation and filing of sales tax returns. He LTBA proposed the FBR should consider in coordination with Nadra, the development and deployment of a secure mobile application for biometric verification. This solution may include facial recognition or fingerprint scanning wing smartphone technology and secure integration between the FBR and the Nadra. The expected benefits included enhanced taxpayer's facilitation particularly for overseas Pakistanis and remote areas residents, improved compliance rate with quicker registration and fewer delays; expanded lax base and alignment with FBR's digital transformation and automation goals. The association is confident that this initiative would greatly enhance the accessibility, efficiency, compliance and Inclusivity of FBR's taxpayers' registration system and ease filing of sales tax returns and enhance the revenue collection, it added. Copyright Business Recorder, 2025
Express Tribune
9 hours ago
- Express Tribune
Police bust gangs, recover over Rs10m
The police have claimed recovery of an unusually high amount of robbed and stolen cash and vehicles in separate raids which ended up in killing of three suspects and arrest of 12 others. SSP Adeel Hussain said that over Rs10 million cash, eight cars and a tractor have been recovered from the suspects including a woman. Two suspected motorbike lifters of Malano gang and one of Laghari gang, identified as Muzaffar Malano, Deedar Malano and Aashiq Ali Laghari, were killed in police encounters this week. They were booked in 16 FIRs of motorbike snatching. Following back to back incidents of robberies, including the looting of Rs8.4 million cash at gunpoint from the officials of an ice cream factory in the SITE area on July 14, Chandio constituted a team of four police officials to hunt the suspects. So far two of the five robbers involved have been rounded up. The suspects Bilal and Ali Shaikh allegedly handed back around half of the looted cash to the police. Chandio further mentioned that four fake faith healers have also been rounded up with a recovery of Rs3 million cash which they had allegedly swindled from their followers. They include Waheed Sajjan, Aashiq Hussain Solangi, Dhani Bux Solangi and Raja Mugheri. A woman, Shabana Naeem, had allegedly masterminded and executed a house theft on May 30 in Latifabad in the limits of A-Section police station. She, along with her accomplice Noman Baloch, stole Rs1.2 million cash. The SSP said, both of them have been nabbed and Rs800,000 has so far been recovered from them. After the press conference, the SSP distributed appreciation certificates among the police officers and returned recovered cash to the complainants of the robbery and theft FIRs. The SSP shared that another gang of four suspects, identified as Mola Bux, Rasool Bux, Iqbal Panhwar and Abdul Jabbar, were apprehended for their alleged involvement in the car theft cases.
Business Recorder
a day ago
- Business Recorder
14th August Independence Day: Journey of unprecedented sufferings
Pakistanis have endured 78 years of a painful journey comprised of unprecedented politico and socio-economic sufferings. The sufferings of Pakistanis, especially the poor and less privileged, will continue unabated no matter how many Independence Days we celebrate, unless the society is restructured on the principles of equity, fairness and justice—fundamental elements enunciated in Article 3 of the 1973 Constitution of Islamic Republic of Pakistan ['the Constitution']. The way landmark majority judgement of 9-memebre of Supreme Court of Pakistan for rectifying the mistake of Election Commission of Pakistan (ECP) in allocating reserve seats through enacting Elections (Second Amendment) Act, 2024 by the Senate & National Assembly—just a week before the 77th Independence Day—reversed in a review judgement is highly lamentable. It violated well-established jurisprudence of Article 188 of the Constitution, pushing the country towards further anarchy and constitutional breakdown. Such a mockery of justice and constitutionalism is highly deplorable, when the nation is already weary of unabated terrorism, lawlessness, economic meltdown, unprecedented tax burden and high food inflation. The regime's illegitimacy giving rise to unbated political instability and perpetual economic subjugation to International Monetary Fund (IMF) and others are not sudden isolated phenomena. These are because of State captivity in the hands of militro-judicial-civil complex, absentee landowners, pirs (spiritual leaders), industrialist-turned politicians and unscrupulous traders. Pakistan's economy serves these privileged classes. The militro-judicial-civil complex not only enjoys unprecedented tax-free benefits at the cost of taxpayers' money but has failed to deliver for what it is paid. Absentee landowners and industrialists continuously amass wealth by exploiting landless tillers and industrial workers, respectively. Greedy hoarders and dishonest traders create artificial hikes in prices of essential items and thrive on hard-earned incomes of the poor and fixed-income classes without even sparing the hapless citizens during auspicious occasions like Eid when prices go beyond the reach of even well-to-do middle-class families. Adding insult to injury, successive governments keep on imposing and increasing oppressive, unbearable indirect taxes on the poor, while extending unprecedented benefits to the rich and mighty. This has always been the real dilemma of Pakistan, where we are celebrating 78th Independence Day on August 14, 2025! The anti-people alliance of militro-judicial-civil complex is the root cause of our major ills. Through cross marriages, they 'look after' each other and manage to perpetuate control over State institutions and economic resources. For civil bureaucrats, life revolves around good postings, promotions, lucrative benefits, foreign tours and nationalities! Officers having a political clout are requisitioned by federal and provincial ministries for lucrative posts with unbelievable perks and benefits. The so-called civil servants (behaving like brown sahibs believing to be even more privileged than gora rulers) serve their political masters' interests rather than the people, sometimes in defiance of established rules and regulations, destroying the entire structure of civil services, where 'political connections' is now the name of the game. Polarisation, favouratism and politicisation within State institutions are showing their disastrous results. While law and order has always been a grave concern, terrorists now freely attack law enforcement personnel and even the members of armed forces with impunity. Despite taking enormous taxes, people are forced to arrange their own security while the government machinery serves the rulers alone. Even after taking oath for the second time, Prime Minister Shehbaz Sharif has not learnt any lessons from his past mistakes as he continues to act like the 'servant' of those who matter in the land, and keeps on promoting nepotism and cronyism. Once again, under his previous and present rule, many high-clibre officers are denied postings/promotions they deserve on merit or placed in surplus pool on flimsy grounds, while 'loyalists', though junior and incompetent, are enjoying lucrative posts and benefits. There seems no end to such brazen acts on the part of elites that keep on humming the mantra of democracy, but act in an authoritarian and irresponsible manner. Militro-judicial-civil complex and their cronies will never make Pakistan an egalitarian State—as demonstrated repeatedly by them. The latest evidence is the Finance Act, 2025 not imposing a single tax on the rich and mighty to bridge the huge fiscal deficit. On the contrary, indirect taxes have been raised, even under the garb of Income Tax Ordinance, 2001, to further crush the poor and overburden the fast-squeezing middle-class. The same pro-rich approach was adopted in federal budget for FY 2024-25, which not also imposed unbearable tax burden of the lower and middle class salaried persons. Mindless borrowings simultaneously from banks and foreign lenders continue to push the nation in darker abyss of 'debt prison'—debt servicing alone is now the largest burden on the economy absorbing all taxes collected by Federal Board of Revenue (FBR), after 57.5% share to provinces, and even non-tax revenue—all happening due to ruthless spending to fund luxuries of the State Oligarchy. The fiscal deficit, projected in Budget 2025-26 is Rs. 6.5 trillion whereas debt servicing at Rs. 8.2 trillion! In fiscal year (FY) 2025, deficit was Rs. 7.4 trillion and debt servicing was Rs. 8.9 trillion. In FY 2024, budget was prepared under the guidance of MuhmmadIshaq Dar, with debt servicing allocation of Rs. 7.3 trillion that ultimately overran to Rs. 8.16 trillion! The jubilation and merriment over staff-level agreement with IMF on July 12, 2024 for 37-month Extended Fund Facility (EFF) programme of US$7 billion speaks volume of moral bankruptcy of our ruling elites. What a pity that that they celebrate further indebtedness! Just three days before the 84th Pakistan Day, March 23, 2024, Press release of IMF confirming successful completion of SBA was treated as an advance gift of Pakistan Resolution to the nation—height of shameless behaviour! The elites are, however, still happy as they enjoy unprecedented benefits and perquisites, free plots, foreign trips, foreign nationalities, free club facilities, just to mention a few, all funded by the poor taxpayers. On the other hand, there is no political will to provide free health and education to the ordinary people, what to speak of fulfilling other obligations mentioned in the Constitution. Dr. Ishrat Husain, in his book, Pakistan: The Economy of an Elitist State, has aptly observed that in sharp contrast to the East Asian model of 'shared growth', based on rapid economic development, coupled with a rapid reduction in poverty and more equitable distribution of the benefits of development, in Pakistan, the elitist model confers political and economic powers to a small coterie of elite (parasites). While quoting Dr. Ishrat's work, Dr. Khalil Ahmad, in his book, Pakistan Mein RiastiAshrafiyaKaA'roj (Rise of State Oligarchy in Pakistan), has also concluded: 'Pakistan is presently owned and exploited by elites whereas it should belong to the people of Pakistan'. Powerful State officials, in hand with the rich and mighty men in khaki and corrupt politicians, exploit the system for self-aggrandisement. For example, FBR through SROs [Statutory Regulator Orders] at the behest of political masters provides 'legal' ways and means to society's powerful sections to amass huge wealth—exemptions and concessions given to them by acts of Parliament are worth billions of rupees. It is worth mentioning that under Ishaq Dar during 2013-17, FBR issued many favourable notifications, especially for sugar and steel industry. In 2012 when officers of Grade 19-22 were allowed compulsory monetized transport allowance, SRO 569(I)/2012 was issued on 26 May 2012 [still operative] providing that government officials in Grade 20-22 would pay just 5% tax on this allowance. The powerful bureaucrats use official cars, get monetized allowance, and pay meagre tax. On the contrary, their counterparts in private sector pay tax on this perquisite at the normal rate! This injustice was highlighted in an earlier column. It was hoped that with the new Chairman of FBR, Rashid MahmoodLangrial, personal choice and confidant of Prime Minister Shehbaz Sharif, this benefit would be withdrawn. However, he himself continued to enjoy it! It is worth mentioning that in Finance Act 2013, the flying allowance of airline pilots was clubbed with salary, but Ishaq Dar did not extend similar treatment to mighty bureaucrats for their transport allowance showing how elites protect each other and professionals like pilots get raw deals just because they are not part of State Oligarchy. The problem of Pakistan is not scarcity of resources, but unwillingness in tapping and/or properly utilizing and managing their equitable distribution, absence of effective administrative and justice systems to check socio-economic injustice. It has been repeatedly highlighted by different writers that without imposing any new tax or raising the rates of the existing ones, the total revenue collection at federal level alone can be Rs 30 trillion (Rs. 18 trillion direct taxes and Rs. 12 trillion indirect taxes) if existing tax gap is bridged and informal economy is brought into tax net. This level of collection is possible but as a first step, we will have to reform our administrative machinery and judiciary. Expensive State property occupied by State elites (judges and high-ranking civil-military bureaucrats) as 'residences' must be utilized commercially through long-term lease. Their benefits and perquisites should be monetized. Consolidated Pay Package for them, fair and adequate, would reduce corruption, remove a strong sense of elitism and improve governance. For politicians and all State functionaries, an independent and effective accountability apparatus is necessary. Without fundamental structural reforms, we cannot establish a true democratic polity extend socio-economic justice for all, ensure rapid growth with job opportunities for millions of young people, whose frustration is on the rise with every passing day as elites are showing apathy towards them while enjoying luxuries at the State's expense. Brutal and naked exploitation of the have-nots in the Islamic Republic of Pakistan and dehumanization of society are leading to gruesome incidents where people are committing suicides or killing innocents without any remorse and repentance. We will have to move fast to reverse this trend and make Pakistan a true democratic republic for the people, not jagir [fiefdom] of elites. Time has come to make a firm resolve on 78th Independence Day and take definitive actions to implement in letter and spirit Article 3 of the Constitution which says: 'The State shall ensure the elimination of all forms of exploitation and the gradual fulfillment of the fundamental principle, from each according to his ability to each according to his work'. Copyright Business Recorder, 2025
