FBR refuses to share info about ADRCs cases
The Pakistan Information Commission will now evaluate the legitimacy and scope of FBR's secrecy claim under section 216 (Disclosure of information by a public servant) of the Income Tax Ordinance 2001 whether public interest outweighs institutional confidentiality.
According to a tax expert, despite the lapse of considerable time and extensive legal scrutiny, critical information relating to a multi-billion-rupee loss to the national exchequer, allegedly caused through misinterpretation of tax laws by the Alternative Dispute Resolution Committees (ADRCs) of the Federal Board of Revenue (FBR), remains veiled in secrecy and is currently pending before the Pakistan Information Commission (PIC).
'Pakistan needs integrated dry port strategy to decentralise economic activity'
When contacted, tax expert said that controversy centres on claims that the ADRCs, operating under the administrative umbrella of FBR, extended inadmissible tax benefits to select taxpayers by wrongly applying tax provisions, resulting in a substantial financial blow to the state. However, efforts by tax lawyer Waheed Shahzad Butt to bring the full details into the public domain continue to face institutional resistance.
Waheed Butt informed that matter has already been deliberated before the Federal Tax Ombudsman, the President of Pakistan, and both Single and Division Benches of the Lahore High Court. Despite these multiple rounds of judicial and quasi-judicial engagement, the core information sought by whistleblowers and public interest petitioners remains withheld.
At the heart of FBR's defence lies its invocation of Section 216 of the Income Tax Ordinance, 2001, which the tax authority contends protects such data as 'secret and confidential,' thereby exempting it from public disclosure, even when broader national accountability is at stake: Waheed added.
The Pakistan Information Commission is now tasked with evaluating the legitimacy and scope of FBR's secrecy claim under Section 216, and whether public interest outweighs institutional confidentiality.
Shielding questionable ADRC decisions behind a legal cloak contradicts the principles of transparency and fiscal justice. As the matter awaits final adjudication by PIC, eyes remain fixed on whether the truth behind the alleged revenue compromise will finally come to light or remain buried under procedural secrecy.
Earlier FBR has refused to disclose information related to orders passed by the ADRC raises serious questions about transparency and accountability in tax machinery. Order has been passed by the FBR on the basis of directions issued by LHC to provide orders passed by the FBR on the recommendations of the ADRCs to the applicant Advocate Waheed Shahzad Butt through the process provided under Right of Access to Information Act, 2017.
Interestingly, the FBR has also invoked the exclusion clause of the Right of Access to Information Act 2017, which allows certain information to be withheld from the public. The refusal to provide information has sparked concerns among tax experts and lawyers, who argue that the ADRC orders have a significant impact on taxpayers and the economy as a whole, Waheed Butt added.
Access to information is a sine qua non of constitutional democracy. The public has a right to know how public functionaries do their job. The responsibility of public functionaries to disclose what they do and how they do works against both corruption and highhandedness, Waheed added.
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
FC personnel deployed to monitor GLT units in KP
ISLAMABAD: Federal Board of Revenue (FBR) Member Inland Revenue (Operations) Dr Hamid Ateeq Sarwar has said that around 144 personnel of Frontier Constabulary force have been deployed in Khyber Pakhtunkhwa to regulate/ monitor Green Leaf Threshing units, to strengthen enforcement for checking massive evasion in tobacco sector. During the last meeting of the Public Accounts Committee, Dr Sarwar stated that two platoons of FC have been deployed at 13 GLT units for the purpose of enforcement. There are only around 13 GLTs in Pakistan, all fully traceable, making them the most logical taxation choke point. In contrast, there are over 450,000 retail outlets, selling cigarettes and more than 50 cigarette factories – primarily in Khyber Pakhtunkhwa (KPK) and Azad Jammu & Kashmir (AJK) – where enforcement at post-processing levels is far more challenging. FBR to strictly monitor tobacco movement The FED at GLTs, fully traceable processing units—is a key tax enforcement mechanism designed to curb revenue leakage and illicit cigarette manufacturing. By documenting actual volumes processed by manufacturers, the system ensures declared production aligns with tax liabilities, strengthening the national economy. Unprecedented excise increase in recent years on the legitimate cigarette manufacturing companies and too low advance FED in previous years has led to the illicit sector to grow to more than 56% of the market. This increase has been fuelled by smuggled cigarette brands. FBR needs to analyse how much tobacco was processed at GLTs and how much adjustable FED was collected from cigarette manufacturers and how much of this adjustable FED was actually adjusted against the final liability. FBR also needs to check how the GLT processing corresponds with the leaf buying of these manufacturers. Sources told Business Recorder that the country's tax potential from the cigarette sector exceeds Rs 600 billion annually. The two multinational companies that hold 44% of the market paid Rs 292 billion in taxes. Contrary to this, more than 40 local manufacturers controlling the remaining 56% of the market paid a meagre Rs 5 billion. Over Rs 300 billion in tax revenue, more than the federal allocations for education and health combined, has disappeared into the black market. FBR Chairman Rashid Mahmood Langrial recently admitted that over 90% of the cigarette sector operates outside the formal tax system. The Track and Trace System, introduced to enforce compliance, is failing. Only 19 of 413 registered brands are compliant. The government has proposed deploying Frontier Constabulary units in Khyber Pakhtunkhwa to regulate Green Leaf Threshing, signalling the extraordinary scale of the breakdown in civilian enforcement mechanisms. Copyright Business Recorder, 2025
Express Tribune
13 hours ago
- Express Tribune
Plugging tax leaks
Listen to article That more than Rs2.25 trillion have been lost to tax evasion through 'fake' and 'flying' invoices in just two years is a staggering admission — and one that lays bare the scale of institutional failure plaguing Pakistan's revenue machinery. The figure, disclosed by the Federal Board of Revenue, represents nearly a third of the total taxes collected on the customs side, showing just how deeply entrenched the problem has become. Such large-scale evasion at a time when the country is navigating a fragile economic recovery is not only unsustainable but damaging to the government's credibility. Successive administrations have repeatedly promised to broaden the tax base and improve documentation, yet loopholes that enable outright fraud continue to be exploited with impunity. The use of fake invoices to claim undue input tax credits or reduce tax liability has become a routine practice, facilitated in many cases by internal collusion. FBR has claimed that it is the only federal institution to have taken action against its own officers involved in such malpractices. However, internal accountability alone will not suffice. While punitive measures may deter some, the persistence of such fraudulent practices points to a structural rot that requires far more than selective disciplinary action. Pakistan's low tax-to-GDP ratio is a well-documented constraint on fiscal policymaking. It limits the state's capacity to provide essential services and meet its debt obligations without resorting to regressive indirect taxation or repeated external borrowing. To plug these revenue leaks, the government must move towards comprehensive digitisation of invoicing and supply chains along with stronger audit systems — all the while depoliticising the FBR's functioning. No serious economic recovery can be achieved while the state remains incapable or unwilling to curb fraud within its own revenue apparatus. This haemorrhaging must end if the country wants sustainable recovery.
Express Tribune
a day ago
- Express Tribune
PM approves creation of digital ecosystem at FBR
Prime Minister Shehbaz Sharif on Saturday granted approval for the formation of a modern and globally standard digital ecosystem in the Federal Board of Revenue (FBR), besides directed hiring of internationally renowned experts. During a meeting to review progress on the ongoing reforms in the FBR, the prime minister observed that the economy was moving in a positive direction due to the recent reforms in FBR. Ministers Muhammad Aurangzeb, Ahsad Khan Cheema, Minister of State Bilal Azhar Kayani, FBR Chairman, Chief Coordinator Musharraf Zaidi, economic experts and other senior officials attended the meeting, PM Office Media Wing said in a press release. The meeting was briefed on the progress regarding the formation of a modern digital ecosystem aimed at centralizing FBR's data and enabling real-time monitoring of the entire value chain. The prime minister, while chairing the meeting, emphasized that not only digitization, but a comprehensive digital ecosystem should be established to strengthen the new system and directed that all the relevant data, from raw material production and import, to manufacturing of goods and the final consumers' purchase, should be integrated into a single system. The prime minister said the system should be made so effective that the entire value chain could be monitored digitally in real time. He further opined that the centralized data collected under this system should be utilized for the economic strategic decision-making. The prime minister stressed that the goal of reducing taxes for the common man could only be achieved by increasing the tax base and ending the informal economy. Incentive scheme Prime Minister Shehbaz Sharif has decided to continue the incentive scheme for the remittances of overseas Pakistanis to Pakistan. He directed the Ministry of Finance to immediately release funds for the Workers' Remittances Incentive Scheme on priority basis. He said, "Overseas Pakistanis are our strength and a valuable asset of Pakistan." "The hard-earned remittances of overseas Pakistanis play an important role in the development of Pakistan, which the entire nation, including me, values," he added. In the fiscal year 2025, he said overseas Pakistanis played a key role in achieving the target of current account surplus for the first time in 14 years by sending a record high of $38.3 billion in remittances. These remittances not only helped pay the rising import bill but also helped increase foreign exchange reserves, he noted. He said "Overseas workers and businessmen play a crucial role in the country's development and progress by sending remittances to their homeland."
