Poultry and tobacco tax evasion of around PKR 450 billion is revealed by the FBR (Federal Board of Revenue)’s chairman during the meeting of the National Assembly’s Standing Committee on Finance. Syed Naveed Qamar chaired the meeting.
According to the FBR chairman, the poultry sector, which paid PKR 10 billion in taxes, only contributed PKR 1.3 billion. This underpayment is partly due to the lack of proper cost accounting within the poultry sector. He highlighted substantial profit margins, where a chick costing PKR 70-80 is sold for as high as PKR 180.
The Federal Board of Revenue (FBR) has identified significant issues in the poultry industry, including under-declaration of sales prices and tax evasion. Daily production ranges from 800,000 to 900,000 chicks. Officials estimate outstanding dues from the industry over the past 5 years could reach PKR 150 billion, with annual liabilities of PKR 30 billion.
Moreover, the chairman also explained that the recent presidential ordinance regarding income tax was enacted to monitor production in these certain problematic sectors. This ordinance extends the authority from sales tax to income tax. Misinterpretations of section 138 of the income tax ordinance had occurred, and taxpayers are assured protection at three stages. Tax issues are typically identified at the tribunal level, known to both the officer and the taxpayer.
The FBR’s chairman stated that there is an estimated tax evasion of PKR 300 billion in the tobacco sector. He also mentioned that any cigarette without the mandatory stamp is illegal. The FBR will seek help from provincial law enforcement agencies to combat the trade of illegal cigarettes.
Syed Naveed Qamar, chairman of the standing committee, raised concerns about potential harassment because of a new ordinance issued just before the national assembly session and weeks before the budget. Many members of the committee shared these concerns. The ministry of law’s officials cited financial difficulties as the reason for the urgent ordinance. Chairman Qamar questioned them why the urgency was not challenged.
Chairman Qamar, along with committee member Mobeen Arif, expressed concerns about the ordinance. They viewed it as a potential misuse of the authority but agreed to let it pass with the understanding this should not be a regular occurrence. The chairman also mentioned that amendments could be made to the ordinance once it reaches the national assembly.
