ISLAMABAD – The Senate Standing Committee on Finance has asked the Federal Board of Revenue (FBR) to define clear thresholds for allowing arrests in tax fraud cases under the proposed Finance Bill 2025-26. Lawmakers stressed the need for fairness and clarity before granting such powers.
In the current proposal, FBR seeks powers to arrest individuals, seal business premises, and even block bank transactions for those evading registration or committing tax fraud. The board suggested a Rs10 million limit as the minimum threshold for allowing arrests in such cases.
However, the proposal sparked heated debate during the committee meeting. Senator Farooq H Naek argued that arrests should only be made after an investigation and with a judge’s permission, not during the initial inquiry. He compared the move to earlier NAB laws that were later amended to prevent premature arrests.
Meanwhile, FBR Chairman Rashid Mehmood Langrial defended the proposal, saying tax fraud involves billions of rupees and should not be taken lightly. He questioned why theft of small items is considered a serious offense, while massive tax fraud is overlooked.
Minister of State for Finance Bilal Azhar Kiyani clarified that new safeguards have been added. Now, an Assistant Commissioner would require the Commissioner’s approval before initiating an inquiry, unlike the previous law where arrests could happen without such oversight.
Still, opposition senators like Shibli Faraz rejected the proposed sweeping powers, urging the FBR to reinstate the earlier Rs1 billion arrest threshold. While the FBR suggested 5-year imprisonment for tax fraud under Rs1 billion and 10 years for frauds above that, the final decision is yet to be made.