The Federal Board of Revenue (FBR) informed a Senate sub-committee on Thursday that annual tax evasion in Pakistan’s tobacco sector is estimated at around Rs. 40 billion, significantly lower than the government’s publicly cited figure of $1 billion (approximately Rs. 280 billion).
The disclosure was made during a meeting of the Senate Standing Committee on Interior and Narcotics sub-committee, chaired by Senator Saifullah Abro. The session focused on issues including tax evasion, smuggling, narcotics control, misuse of tax-exempt imports, and FBR enforcement measures.
During the meeting, Senator Abro questioned FBR officials regarding government advertisements claiming that tax theft in the tobacco industry amounted to $1 billion annually. In response, FBR representatives stated that their internal estimates place the figure at around Rs. 40 billion.
The officials further informed the committee that they were not aware of the nationwide anti-tax theft awareness campaign currently being run by the federal government.
Expressing concern over the discrepancy, Senator Abro stressed that public awareness campaigns should be based on accurate and verified data. He directed the FBR and relevant authorities to bring the matter to the attention of the prime minister and ensure that any inaccurate information in official advertisements is corrected.
“This raises serious questions about the information provided to the prime minister and the Ministry of Information regarding tax evasion in the tobacco sector,” Senator Abro remarked.
The committee was also informed that the FBR had taken enforcement action against 16 tobacco factories on allegations of tax fraud. Members received a briefing on the regulatory framework governing the tobacco industry and ongoing efforts to improve compliance.
In addition, the panel reviewed concerns that raw materials imported under tax exemptions for specific areas were allegedly being diverted for use elsewhere, resulting in substantial losses to the national exchequer.
Senator Abro directed all relevant departments to submit comprehensive reports and recommendations at the next committee meeting.
The Federal Investigation Agency (FIA) also briefed lawmakers on progress in an investigation into the theft of 2,828 cartons of cigarettes. Senator Abro assured full support for the inquiry and called for strict action against all individuals found responsible, including senior FBR officials if evidence warrants such action.
Senators Aamir Waliuddin Chishti and Hidayatullah Khan attended the meeting as special invitees.
The committee chairman also criticized the absence of senior officials from key institutions, emphasizing the importance of leadership presence when matters involving national revenue and enforcement are under review.
At the conclusion of the meeting, the committee directed all departments concerned to submit complete records related to tax evasion and smuggling cases. Members reiterated their support for enforcement agencies and stressed that all those involved in revenue-related violations should be held accountable without discrimination.
