Latest news with #RashidLangrial
Business Recorder
5 days ago
- Business
- Business Recorder
Sugar price hike: PAC unhappy with FBR, ministry's briefings
ISLAMABAD: The Public Accounts Committee (PAC) on Wednesday expressed dissatisfaction with briefings from both the Federal Board of Revenue (FBR) and the Ministry of Food Security regarding the recent surge in sugar prices. The committee has now demanded detailed information on the government's decision to import sugar. The committee under the chairmanship of Junaid Akbar received a briefing on the ongoing sugar crisis. During the session, PAC members grilled officials, scrutinising the issues surrounding the availability and pricing of sugar. Sugar price hike: NA panel to identify 'beneficiaries' According to FBR officials, the retail price of sugar in all four provinces is currently Rs 183 per kg. A summary for importing 500,000 tons was sent; 300,000 tons will be imported now, officials stated. Rashid Langrial, FBR chairman said that the matters of food import or export are handled by the Food Ministry. He explained that the cabinet made the decision; the FBR is bound by the decision. He further said that they are directed to abolish the 20 percent customs duty on imports. Sales tax was reduced from 18 to 0.25 percent. The advance tax which is 5.5 percent has been set to 0.25 percent, he added. Copyright Business Recorder, 2025
Business Recorder
5 days ago
- Business
- Business Recorder
A system that breeds fraud
EDITORIAL: In his briefing to the National Assembly's Public Accounts Committee recently, FBR (Federal Board of Revenue) Chairman Rashid Langrial not only acknowledged that the potential volume of tax fraud in Pakistan could be as high as Rs700 billion, with sales tax fraud posing a particularly knotty challenge, he also conceded that its complete elimination remains unlikely. This is, in effect, an admission that there is something inherently wrong with the country's tax administration and overall taxation structure. While the FBR chairman readily owned up to the challenge posed by tax fraud and evasion, there remains within the tax bureaucracy a stubborn refusal to honestly reckon with the root causes of the country's dismal tax compliance. Firstly, there is a need to recognise that such huge levels of tax evasion cannot exist without the incompetence, and in too many cases, outright connivance of those manning the tax bureaucracy. But even more fundamentally, there is the structurally problematic over reliance on excessively high tax rates — rates that are not only steep but subject to frequent and accelerating increases — eroding public trust in and compliance with the system. For large segments of the economy, paying taxes at prevailing high rates has become substantially costlier than bearing the cost for evading them, yet the tax bureaucracy remains unwilling to confront the glaringly obvious truth: the higher the tax rate, the greater the temptation for evasion. The costs of evasion, such as bribing tax officials, are often significantly lower than the burden of full tax compliance in an environment of high rates. The chairman highlights sales tax fraud, yet in a country where the standard sales tax rate is 18 percent, and even higher in some cases, such high rates practically invite evasion. Anyone with even a basic grasp on tax policy can see then that the most effective way to broaden the tax net would be through lowering tax rates, but that understanding remains inexecutable in the absence of political will to tax all incomes irrespective of origin. Then there is the problem posed by a tax structure dependent on minimum tax on turnover, which is inherently punitive towards compliant taxpayers. Under this regime, even if an entity has incurred a loss and so certified by audit, it must still pay the legally mandated minimum tax on its revenue. How such a policy encourages businesses to join the tax net remains a mystery, as loss-making enterprises can easily be driven out of operation under this punishing framework, especially since Pakistani companies have to pay a minimum tax ranging from 0.5 to eight percent on turnover, irrespective of profitability. Essentially, this system penalises businesses for entering the tax net and for fully adhering to tax laws, while also undermining investment and suppressing broader economic activity. Added to this are the complications caused by high withholding tax rates. Not only do these remain exorbitant, but claiming and actually receiving refunds has become an increasingly onerous process. In many cases, businesses and individuals are unable to recover their dues without resorting to paying 'speed money' to relevant officials, creating yet another reason to simply stay out of the tax ambit than to expend effort and resources on documenting receipts, invoices and financial records for countless transactions only to be denied the full refund that is ultimately owed. We thus find ourselves trapped in a vicious, never-ending cycle. Multiple studies have highlighted the enormous cost of complying with Pakistan's complex and punitive tax system. A recent ADB study, for instance, clearly demonstrates the link between high rates, high compliance costs and increased tax evasion. Yet, judging by the prevailing attitude within the tax bureaucracy, there seems little hope that these legitimate concerns will be meaningfully addressed. Copyright Business Recorder, 2025
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.
Express Tribune
17-07-2025
- Business
- Express Tribune
NA panel grills officials on sugar import
The National Assembly Standing Committee on Finance on Wednesday raised several questions regarding sugar imports and the provision of duty exemptions during its meeting chaired by Syed Naveed Qamar. The committee also took up various legislative agenda items, including the Parliamentary Budget Office Bill and a proposed tweak to Corporate Social Responsibility law. Members further questioned officials about a meeting between the government and the business representatives concerning certain budgetary measures. Addressing the issue of sugar imports, the chair asked for clarification from officials. Federal Board of Revenue (FBR) Chairman Rashid Langrial responded that the Ministry of National Food Security would be in a better position to answer. However, Qamar insisted that the FBR must have played a role. Langrial explained that the FBR had implemented the federal cabinet's decision to reduce the 18% sales tax and 20% customs duty on sugar imports. "Reducing taxes and duties on sugar lowers its price in the local market," he told the committee. However, the committee chair suggested that the government should withdraw from involvement in the sugar sector, because there was no shortage of the commodity in the country. Committee member Javed Hanif asked about the International Monetary Funds' (IMF} position on the sugar import. In response, Federal Finance Secretary Imdad Ullah Bosal said they were negotiating with the lender, adding that the government would have to implement the IMF's conditionalities. Later, the chair raised a query about the talks between the government and the businessmen on the issue of their protest. Minister of State for Finance Bilal Azhar Kayani replied that talks were held on Tuesday and a committee has been set up to find solution to the controversial issues within a month. Meanwhile, a report of the sub-committee on the corporate social responsibility law was presented in the meeting. While reviewing amendments to the law, the committee was told that the Securities and Exchange Commission of Pakistan (SECP) opposed the amendments. The SECP chairman informed the committee that these amendments would increase operational costs for companies. However, the chair noted that corporate social responsibility could not be left solely to the discretion of the private sector. The SECP chief said that the issue had come up only for oil and gas firms, but it was being applied to all companies. The finance secretary backed the SECP's contention, saying that "doing so would increase the companies' production cost". Committee Member Nafisa Shah pointed out that companies were already paying 18% sales tax and super tax, yet the Ministry of Finance appeared to object specifically to social sector spending. She added that while the law requires firms to allocate 1% of their profits to CSR, many were spending beyond that threshold. Minister of State Kayani suggested that the Finance Ministry and the SECP should bring their proposals after consulting with the companies. Committee Member Mirza Ikhtiar Baig said that all the chambers of commerce and industry and multinational companies were consulted on this law. The Finance Secretary requested the committee for some more time to consider the matter.
