Senate panel seeks FBR records over Rs730.8bn tax exemption gap

A Senate subcommittee has demanded a detailed investigation into a Rs730.797 billion gap between imports recorded under the FATA/PATA tax exemption scheme and the consumption certificates issued against them, and directed the Federal Board of Revenue to produce complete records for the inquiry.

The figures were presented at a meeting of the Subcommittee of the Senate Standing Committee on Interior and Narcotics Control on November 10, 2026, chaired by Senator Saifullah Abro. Senator Umer Farooq and senior officials of the FBR, the Federal Investigation Agency and Customs attended.

The FBR told the committee that imports worth Rs1,120.662 billion were recorded between 2018 and June 2026. Consumption certificates covered imports worth Rs389.865 billion, leaving an unreconciled difference of Rs730.797 billion.

By sector, the apparent differences were Rs148.248 billion in steel, Rs146.955 billion in textile and fabric, Rs100.884 billion in food, and Rs76.487 billion in ghee and oil.

The FIA told the committee it had issued 512 notices to companies. Nineteen companies joined the proceedings and provided partial records, while more than 100 notices were returned or never delivered. The agency said the investigation was continuing, the matter was before a competent court, and that possible corruption, abuse of authority, diversion of goods and wrongful release of securities were being examined. Investigative proceedings are under way and no final finding of guilt has been announced.

The committee was told consumption certificates were expected to have been issued for 60 of the 223 companies involved. Abro questioned 20 certificates involving about Rs64 billion and directed the FBR to provide their full records and justification. He cited terms of reference involving about Rs74 billion and asked whether payments had been released without proper verification and scrutiny.

He also directed the FBR to examine the Statement of Requirements issued in 2021 and determine whether certificates and payments had been processed under the applicable legal framework. The investigation, he said, must cover all companies and individuals who may have been involved rather than selected cases.

Coordination between the FBR and the FIA also drew questions. FBR officials said the department had not received a formal court notice, while the FIA said its legal adviser had received the relevant court order. The chairman and members asked why the FBR had remained unaware of the court proceedings for nearly two months.

Abro raised Article 66 of the Constitution and asked the FBR to explain the legal basis for withholding records from Parliament and to name which authorities could lawfully receive them. Members said parliamentary oversight should be respected.

The committee also raised concerns about individuals reportedly holding expensive assets, travelling in large convoys and having no clear declared source of income. Abro asked the FBR to investigate possible financial irregularities and money laundering, including the financial trails of influential people and networks.

Members discussed the alleged movement of tobacco-related material through the exemption system and its possible use by companies operating outside the exempted areas. Abro called for coordinated action by the FIA, the FBR, Customs and other enforcement agencies, and directed them to provide complete import records from January 2018 onwards, including consignments, routes, destinations and the companies involved.

Customs authorities were asked for records of imports through Khyber Pakhtunkhwa and FATA, particularly after June 2026. The committee wants container tracking examined to establish whether companies operating elsewhere in the country used the exemption mechanism improperly.

ProPakistani reported that the FBR failed to submit records in the case and that the Senate investigation has faced delays.