Islamabad: Finance Minister Muhammad Aurangzeb on 11 October 2024 highlighted that nearly half of the PKR 3.4 trillion tax evasion in Pakistan is linked to the corporate sector. This alarming revelation came during a press briefing with the Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial, where stringent measures against tax evaders were announced, including potential imprisonment.

According to Zameen.com, the briefing addressed the critical tax-to-GDP ratio, currently between 9-10%, which is below the desired 13%. Minister Aurangzeb stressed the importance of correcting this imbalance to foster economic stability and sustainable growth. Furthermore, recent arrests related to tax evasion cases, particularly involving a major footwear company, underscore the government’s commitment to intensifying its crackdown on corporate tax fraud.

Chairman Langrial reiterated the FBR’s dedication to eradicating tax evasion, particularly by non-filers, with a deadline set for October 14. He detailed the FBR’s efforts to implement a new value-added tax (VAT) system for sales tax collection despite facing resource challenges. He also highlighted ongoing specialized training programs aimed at boosting the FBR’s auditing capabilities.

The FBR report detailed extensive tax fraud across various sectors, including iron and steel, cement, beverages, batteries, and textiles, with estimated losses amounting to PKR 227 billion due to underreported earnings and fraudulent tax claims. Specific cases cited included significant evasion in the iron and steel industries through dubious scrap metal and coal claims, as well as the battery sector’s evasion via lead-related tax claims.

Minister Aurangzeb reaffirmed the government’s resolve to pursue and penalize those involved in such deceptive practices, signaling a tough stance on corporate entities undermining the nation’s financial health.