The Federal Board of Revenue (FBR) has decided to launch a major crackdown on wealthy individuals who are potential tax dodgers and have engaged in massive misdeclaration of their assets and income. This initiative was prompted by a discovery that only 1,100 individuals in Pakistan have declared a net worth of at least 1 billion rupees.
This number shrinks even further to just 100 people who have declared assets or income worth 3 billion rupees or more across the country.
Strategy and Targets
According to The News, a top FBR official confirmed that a dedicated social media monitoring team has been assigned to identify potential tax dodgers in major urban centers of Pakistan. “A dedicated team under the supervision of the FBR’s Intelligence and Investigation Inland Revenue Service director general has been tasked to identify and then launch a crackdown against those who are shown to be worth billions of rupees but declared much less or even nil income in their filed tax returns,” the sources said.
The FBR identified event managers in one major urban center who managed a wedding event where 148 million rupees were spent. This single event management company arranges four to six such weddings per month. The FBR has secured information from these companies to identify hundreds of individuals who have spent millions on organizing marriage functions and buying expensive jewelry.
Examples of Tax Evasion
The FBR also identified a showroom owner whose assets are worth billions but who declared a negligible income. Similarly, a real estate tycoon who constructed multi-story malls in Islamabad was found to have declared no significant assets in his returns. An official stated, “We have scrutinized the last fiscal year’s returns and found massive misdeclarations, so the FBR’s I&I IRS is ready to launch a crackdown against tax evaders to create a deterrent.”
To support this effort, the FBR has deputed 450 Inland Revenue Service (IRS) inspectors across the country to conduct on-ground surveys and verify the declared assets and income of wealthy individuals. The FBR is also in the process of hiring over 1,600 auditors to select and conduct effective audits this fiscal year. The agency has set an ambitious target of collecting over 400 billion rupees through enforcement to achieve its overall tax collection goal of 14.13 trillion rupees. The FBR is facing a shortfall of at least 100 billion rupees in achieving its first-quarter target (July–September) agreed upon with the International Monetary Fund, making effective enforcement a crucial option to meet its goals.
