A recent audit report has revealed a shocking Rs662.7 billion loss in Pakistan’s tax system during the 2023–24 fiscal year. The Auditor General of Pakistan released these findings in its latest audit report. This huge gap has raised serious questions about the performance of the Federal Board of Revenue (FBR). The report highlights major weaknesses in income tax, sales tax, federal excise, and customs collection.
The income tax department alone faced losses of Rs457 billion due to several key issues. Super tax worth Rs167.9 billion remains uncollected due to legal delays. In addition, field officers approved questionable deductions, causing a Rs149.6 billion loss. Other problems include unpaid demands of Rs62.3 billion and uncollected withholding taxes of Rs45.4 billion. Moreover, Rs22.9 billion in minimum taxes were never recovered.
Meanwhile, the government lost Rs186.7 billion in sales tax and federal excise duties. Most of this came from input tax credit claimed using fake or blacklisted invoices. This caused a loss of Rs123.6 billion. There were also other issues such as poor tax calculations, fake exemptions, and misreporting of sales. Some sectors remained unregistered, which led to billions in missed taxes. The report found short collections in excise duties on gas, cement, and air travel.
In customs, auditors found Rs18.9 billion in irregularities. Over Rs12.6 billion worth of seized goods were never auctioned. Companies used raw materials duty-free without submitting proof of export, causing a Rs3.3 billion loss. Misuse of full exemptions and wrong import classifications led to further losses. These issues show poor checks and weak enforcement across FBR systems.
The report includes 18 key reform suggestions to fix these flaws. It calls for strict e-verification in tax systems like IRIS and WeBOC. It also urges fast legal action against fake invoices and paper companies. Moreover, it suggests creating special legal and audit teams for pending tax cases. The report warns that without action, Pakistan’s tax system will keep losing money and public trust.