Latest news with #Langrial
Business Recorder
18-07-2025
- Business
- Business Recorder
Pakistan facing over Rs700bn tax fraud, NA's PAC body told
ISLAMABAD: The Federal Bureau of Revenue (FBR) Chief Rashid Langrial on Thursday said Pakistan is facing tax fraud of worth over Rs700 billion. Briefing the sub-committee of NA's Public Accounts Committee (PAC), FBR chief said that sales tax fraud in Pakistan is alarmingly higher than in other countries. He estimated the potential volume of tax fraud at over Rs 700 billion, emphasizing that despite improvements in the system, the complete elimination of sales tax fraud remains unlikely. Finance Act expands definition of tax fraud He noted that Pakistan's current level of tax evasion has escalated significantly, though some success has been achieved in partially controlling sales tax-related fraud. The FBR chairman further stressed the need to enhance post-audit mechanisms and enforce strict penalties to curb the issuance of fake invoices. He also revealed that Rs200 billion were recovered during the last fiscal year following the clearance of tax litigation cases in courts. Langrial added that FBR has been granted powers to control tax fraud and recover dues from fraudulent cases. However, he cautioned that the recurring release of arrested tax evaders undermines deterrence and will not effectively prevent future fraud.
Business Recorder
18-07-2025
- Business
- Business Recorder
Country facing over Rs700bn tax fraud, NA's PAC body told
ISLAMABAD: The Federal Bureau of Revenue (FBR) Chief Rashid Langrial on Thursday said Pakistan is facing tax fraud of worth over Rs700 billion. Briefing the sub-committee of NA's Public Accounts Committee (PAC), FBR chief said that sales tax fraud in Pakistan is alarmingly higher than in other countries. He estimated the potential volume of tax fraud at over Rs 700 billion, emphasizing that despite improvements in the system, the complete elimination of sales tax fraud remains unlikely. Finance Act expands definition of tax fraud He noted that Pakistan's current level of tax evasion has escalated significantly, though some success has been achieved in partially controlling sales tax-related fraud. The FBR chairman further stressed the need to enhance post-audit mechanisms and enforce strict penalties to curb the issuance of fake invoices. He also revealed that Rs200 billion were recovered during the last fiscal year following the clearance of tax litigation cases in courts. Langrial added that FBR has been granted powers to control tax fraud and recover dues from fraudulent cases. However, he cautioned that the recurring release of arrested tax evaders undermines deterrence and will not effectively prevent future fraud.
Business Recorder
16-07-2025
- Business
- Business Recorder
No political victimisation through FBR
EDITORIAL: That the Federal Board of Revenue (FBR) is no longer known for being a political Hit Man is something of a relief in a country where the line between accountability and political witch-hunts has long been erased. Unlike NAB (National Accountability Bureau) — which many believe was tailor-made to serve exactly that purpose — the FBR has, to the credit of the present government, largely stayed out of headlines accusing it of partisan targeting. Chairman Rashid Mahmood Langrial's categorical statement before the Senate Standing Committee on Finance that there is 'no political victimisation' and 'no pressure from high-ups' is therefore welcome. But it does not put the matter to rest. Complaints have now surfaced — and not from fringe quarters but from inside the Senate. Senator Afnanullah Khan has alleged that a notice was issued to an IT company registered under his name for a project that never materialised due to the Covid pandemic. He claims the case, spearheaded by an official from the Corporate Tax Office in Islamabad, was deliberately fabricated. Another senator, Mohsin Aziz, pointed out that it has become common practice for cases to be reopened against taxpayers without sufficient cause. These are serious allegations. And while Langrial has promised action, including prosecution, if wrongdoing is proven, it is important that such probes are not allowed to fade away quietly. If a tax official has indeed filed a wrongful case for ulterior motives, then it is not just a matter of abuse of power — it is sabotage of public trust in the tax system. And a country that already struggles with chronically low tax compliance simply cannot afford to further erode confidence in the FBR's impartiality. That concern is even more pertinent when viewed in light of the FBR's well-documented institutional weaknesses. The Board remains woefully inefficient at performing its core function — broadening the tax net and enforcing equitable compliance. It continues to lean heavily on a narrow base of registered filers while leaving vast sections of the economy, including large segments of the elite, untouched. Add political harassment to this mix, and the FBR risks going the way of NAB — feared, loathed, and eventually dysfunctional. Langrial's efforts to clean house, such as warning officers against lobbying for postings and issuing notices against undue influence in administrative matters, deserve credit. But the test lies in follow-through. If the FBR is to avoid becoming another instrument of political engineering, it must demonstrate — quickly and clearly — that internal complaints are handled with transparency and resolve. There is also an urgent need to institutionalise whistleblower protections and accountability mechanisms within the revenue service. There is no question that the state needs a strong, independent, and capable tax authority. But independence cuts both ways. It protects against political meddling, but it also demands internal discipline. The moment tax notices start being seen as weapons to settle scores or pressure adversaries, the institution begins to lose legitimacy. For an economy as fragile and indebted as Pakistan's, the damage from such erosion could be long-lasting. The government would do well not to tempt fate by ignoring the red flags. The moment a tax official steps out of line, the response must be swift and public. Because once the perception sets in that the tax authority is being used for harassment — even occasionally — it becomes very hard to undo. Copyright Business Recorder, 2025
Business Recorder
10-07-2025
- Business
- Business Recorder
FBR chief rules out withdrawal of law disallowing 50pc cash sales expenses
ISLAMABAD: Chairman Federal Board of Revenue (FBR) Rashid Mahmood Langrial categorically stated that the government will not withdraw the new legislation, disallowing 50% of expenditure attributable to cash sales exceeding Rs 200,000 per transaction. FBR Chairman informed the Senate Standing Committee on Finance that the law has been approved by the National Assembly Standing Committee on Finance and could only be changed in the next Finance Bill (2026-27). 'We have understanding that the law has also been cleared by the Senate Standing Committee on Finance. The legislators have approved the law and not the FBR', Langrial clarified. Senate committee members were surprised to hear that the Senate Finance Committee has cleared the said law. Senator Mohsin Aziz pointed out that it is a anti-business law and you can ask any businessman about the negative implications of this law. Businesses struggle with new tax rule on high-value cash sales FBR Chairman responded that we are moving towards cashless economy. If a person is engaged in sales, it should not be done in cash beyond a certain limit. Senator Sherry Rehman stated that the PPP is against this law which is a draconian law. This new provision introduced through Finance Act 2025 has been implemented from July 1, 2025. The disallowance introduced via Section 24 of the Income Tax Ordinance, 2001 pertains exclusively to the head 'Income from Business', as defined under Section 18. Copyright Business Recorder, 2025
Business Recorder
02-07-2025
- Business
- Business Recorder
FBR seeks 18pc tax-to-GDP ratio by 2027-28
ISLAMABAD: Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial Tuesday said that to achieve a national tax-to-GDP ratio of 18 percent by 2027–28, the provinces would be required to contribute three percent (currently 0.8 percent), amounting to Rs5.265 trillion annually (currently Rs961 billion), and the federation 15 percent (currently 11.3 percent, including the petroleum development levy (PDL)). In a recorded press conference, flanked by Minister of State for Finance Bilal Azhar Kayani, the FBR chairman warned that provisions in the law would be invoked to block avenues for tax fraud. On the criminal side, the scope of the law has been revised, and no criminal clauses will be used for tax recovery—only to prevent tax fraud. Langrial stated that tax collection through enforcement measures increased eightfold in 2024–25. The federal revenue (FBR + PDL) to GDP ratio is expected to reach 15 per cent by fiscal year 2027–28, while provinces will need to accelerate efforts to achieve three per cent during the same period. The federal revenue (FBR + PDL) to GDP ratio increased to 11.3 per cent in 2024–25, compared to 9.8 per cent in 2023–24, marking the highest growth. Improving tax-to-GDP ratio crucial to ease Pakistan debt burden: FBR official 'For the first time, all credible international institutions have recognised the FBR's efforts in additional revenue collection through improved compliance,' said the FBR chairman, adding that last year, the FBR's revenue-to-GDP ratio increased to 10.2 percent during fiscal year 2024–25—significantly higher than in the last 10 years. In June 2023–24, it was just 8.8 percent. He emphasised that the country needs to enhance the tax-to-GDP ratio to ensure sustainable economic growth. The increase in the tax-to-GDP ratio is due to three factors, including autonomous growth through inflation. Last year, Rs1.9 trillion was collected from inflation, while this year, ending in June 2025, Rs766 billion was received. In fiscal year 2023–24, new taxes and rates generated Rs107 billion, while this year, Rs805 billion was generated. The biggest shift came from enforcement and implementation this year, with a focus on compliance. Last year (2023–24), Rs105 billion came through compliance; this year, it was Rs865 billion—an eightfold increase in implementation for compliance rate improvement. 'In 2024–25, we are standing at a 12.1 per cent tax-to-GDP ratio, including 0.8 per cent from provincial contributions. The remaining 11.3 per cent comes from the federation, which includes one per cent PDL and 10.2 per cent from the FBR,' said the chairman, adding that provinces are collecting three taxes: property tax, agriculture income tax, and sales tax on services. Langrial said that taxpayers are the most important stakeholders in Pakistan's revenue system, and the government is committed to rebuilding trust between the tax machinery and the people. He emphasised that tax compliance must be based on facilitation, fairness, and transparency—not intimidation or coercion. 'Anyone who pays their taxes honestly is a crown jewel for the FBR and the nation. They are the reason this system functions,' he said, adding that the FBR has undergone substantial internal reforms over the past year aimed at changing institutional behaviour and making the organisation more service-oriented. He added that FBR offices would remain open to facilitate taxpayers. The chairman strongly rejected the use of pressure tactics in tax collection, making it clear that the FBR's mandate is not to extract more than what is legally due. 'Our officers are not expected to collect more money—they are expected to collect the right amount. That is the principle we are working with,' Langrial stressed. He further said that the FBR is working towards a culture of mutual respect and partnership with taxpayers, asserting that enforcement will be used judiciously and only when required to ensure compliance. Kayani said that the effective fiscal and monetary policies introduced by the incumbent coalition government had resulted in the positive performance of various economic indicators and put the economy on a sustainable growth path. The minister said the headline inflation dropped to 4.5 per cent from 28 per cent recorded when the current government took office in 2024. He said, the policies helped stabilise macroeconomic fundamentals without resorting to supplementary or mini-budgets, 'We outperformed our own expectations,' he said, adding that the policy rate was also reduced from 22 per cent to 11 per cent during the same period. The minister noted that a new three-year Extended Fund Facility (EFF) was successfully negotiated with the International Monetary Fund (IMF), which formed the foundation of the government's macroeconomic stabilisation strategy. Contrary to public skepticism, he said, the agreement was timely and comprehensive, and no additional fiscal tightening was needed beyond initial commitments. The government also posted a current account surplus of $1.8 billion, while foreign exchange reserves climbed to $14 billion by June 20, 2025—levels not seen in recent years. The minister acknowledged that declining reserves had historically been the country's biggest economic vulnerability and one of the primary reasons for repeated IMF engagements. However, he asserted that improved trade balances and reduced reliance on imports had helped reverse this trend. He said the FBR recorded an impressive 26 per cent growth in revenue collection during the fiscal year. Regarding the recently-passed federal budget, the minister credited both houses of Parliament for their constructive role and cross-party support during lengthy legislative processes. He said the budget was focused on consolidating macroeconomic stability while pivoting towards export-led and sustainable growth. The prime minister's vision, he added, is to build an economy that earns more foreign exchange, reduces external vulnerabilities, and creates inclusive prosperity. The government's new five-year export policy aims to remove additional customs duties and rationalise maximum import tariffs to 15 per cent, the minister explained. This, he said, would reduce the cost of machinery and raw materials for export-oriented industries, making them more competitive globally and encouraging industrial investment. The minister also highlighted targeted relief for salaried individuals, noting that income tax burdens had been reduced, resulting in higher take-home pay. He projected inflation for the upcoming fiscal year to remain between 6.5 per cent and 7.5 per cent, while salary increases would exceed that range, helping to protect real incomes. Copyright Business Recorder, 2025
