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

Published September 26, 2019
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

Afghan strikes
Updated 24 Feb, 2026

Afghan strikes

IN the wake of the recent wave of terrorist attacks targeting Pakistan, with most of the atrocities linked to ...
Tug of war
24 Feb, 2026

Tug of war

THE timing may be questioned, but the issue is not new. The PPP and the MQM-P are once again engaging in their old...
Easier CNIC access
24 Feb, 2026

Easier CNIC access

NADRA’S decision to issue CNICs to first-time applicants without requiring them to produce a birth certificate is ...
Hollow applause
Updated 23 Feb, 2026

Hollow applause

The current account turnaround, though largely driven by import compression, rising remittances and bilateral debt rollovers, has eased external pressures.
Delayed appointment
23 Feb, 2026

Delayed appointment

THE recent appointment of a chief election commissioner for Azad Jammu & Kashmir has once again shone a ...
Fragile equilibrium
23 Feb, 2026

Fragile equilibrium

PAKISTAN is not short of food. It is short of resilience. The latest Integrated Food Security Phase Classification...