Top court seeks FBR report on fake companies involved in tax fraud

Published
6
FBR says it is taking measures to recover money from fake companies that have claimed tax refunds. — AFP/File
FBR says it is taking measures to recover money from fake companies that have claimed tax refunds. — AFP/File

The Supreme Court on Thursday directed the Federal Board of Revenue (FBR) to submit a report within two weeks on measures taken to recover money from individuals receiving undue tax refunds through fraud.

FBR Chairman Shabbar Zaidi told the court that the body had sent a summary to the Prime Minister's Office for approval in order to initiate an inquiry against three people who are suspected of creating fake companies.

The court told him to additionally submit a written report of developments in the case in two weeks' time. The FBR chairman said more time will be required to prepare one and requested the bench for the same, but the appeal was declined.

"This is a matter of Rs90 million," remarked Justice Gulzar Ahmed, who was heading the two-member bench hearing the case. "Rs90m went missing from the national treasury and no one knows [about it]."

The judge criticised the performance of the FBR, saying that the body was "protecting its employees", who are suspected to be complicit in the matter.

"How many employees does the FBR have?" he asked. Zaidi told him that the institution employs 21,500 people.

"The salaries of the employees alone probably surpass the recoveries made by FBR," Justice Ahmed remarked acerbically.

He said that those who are found guilty of creating fake companies to commit tax fraud can be sentenced to jail for up to five years, in addition to being ordered to pay back money they received as refunds.

The hearing was adjourned indefinitely.

The FBR is currently taking action against people suspected of committing tax fraud through ghost companies and fake accounts.

In May this year, the FBR's Directorate General of Broadening of Tax Base had unearthed massive sales and income tax fraud through a network of fake accounts in the sugar and textile sectors.

The racket involved a chain of ghost entities in the sugar and textile sectors who were allegedly involved in fake sales.

Follow Dawn Business on X, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Nuclear uncertainty
Updated 23 Oct, 2026

Nuclear uncertainty

With matters frozen in the political and diplomatic spheres, it will take military-to-military engagement to prevent miscalculation in the strategic sphere.
Auto illusion
Updated 23 Oct, 2026

Auto illusion

PAKISTAN’S draft auto policy 2026-31 is ambitious in its targets and directionless in its strategy. It promises...
Two crimes
23 Oct, 2026

Two crimes

THE senseless killing of a teenager by his employers in Multan is a crime that deserves unqualified condemnation. It...
Makkah pact clarity
Updated 22 Oct, 2026

Makkah pact clarity

Fresh aggression can kick off a firestorm that will be in no one’s control, hence it is best to abandon such reckless plans.
Common ground
Updated 22 Oct, 2026

Common ground

Regrettably, the two sides still fail to see the country’s economic, security, and governance crises as challenges that must be solved politically.
The treatment gap
22 Oct, 2026

The treatment gap

A BREAST cancer diagnosis no longer carries the bleak outlook it did a generation ago. Targeted medicines,...