Proposed FBR powers to arrest CEOs, CFOs, board directors opposed

ISLAMABAD: The Senate Standing Committee on Finance on Saturday sternly opposed the FBR’s proposed powers to arrest CEOs, CFOs, and Board of Directors on tax fraud, arguing that the FBR assumed the Code of Criminal Procedure (CrPC) powers.

However, FBR Chairman Rashid Mahmoud Langrial strongly defended the proposed changes in the Finance Bill and stated that there was no country in the world where tax officers were not allowed to make arrests for tax fraud. He said that even India and Bangladesh granted the powers of arrest. He said that the top 5 percent of rich households evaded Rs1.6 trillion. He argued that the workforce stood at 67 million, and the top 1 percent of households evaded Rs1.233 trillion. The top 5 percent evaded Rs1.611 trillion. The remaining 95 percent of the total workforce evaded just Rs0.14 trillion.

The FBR chairman said that the tall wall of protectionism through tariffs resulted in efficiencies in the domestic market, so systematically unworthy and unqualified sons were made CEOs with the help of tariff protections. He asked the committee members to abolish import tariffs to make the economy competitive.

The Senate panel on Saturday continued deliberations to finalise recommendations for Finance Bill 2025-26, under Senate panel recommended removing 18 percent GST on the import of solar panels, increasing minimum wages from Rs37,000 to Rs40,000.

Senator Anusha Rahman from ruling PMLN opposed the FBR’s power to arrest CEOs, CFOs and directors on the allegation of tax frauds and took the stance that the FBR removed CrPC and assumed such powers. She questioned how the FBR could arrest anyone on the basis of just intent of fraud.

Senator Farooq H Naek from the PPP also opposed granting such drastic powers. Senator Shibli Faraz from PTI said that the country turned into a police state and asked the FBR to withdraw giving powers to Commissioners of Inland Revenue (IR) and officers.

The committee asked the FBR to seize and destroy tampered vehicles on the recommendation of Senator Farooq H Naek. The chairman of the Senate panel took up the issue that around 250 companies were issued notices under the Anti-Money Laundering (AML) law in the past so its issuance should be linked with the permission from Minister of Finance and FBR chairman.

Minister for Finance Muhammad Aurangzeb said the issuance of notices to business community under the AML Act was a very serious matter and the government would review the AML powers to the FBR.

The issue came to the light when FBR Member Customs (Policy) explained the creation of proposed Directorate General of Intelligence and Risk Management Customs under the Finance Bill 2025-26. The proposed Directorate would have the powers to exercise under the AML Act.

FBR Member Customs explained that new section (187A-Presumption as to legal character of vehicle), where any vehicle is detained or seized under this Act or the rules made thereunder and such vehicle upon forensic examination is found to having a tampered chassis number or cut and weld chassis or chassis number filled with welding material or re-stamped or body changed, such vehicle shall be presumed to be smuggled, even if registered with any Motor Registration Authority, and shall be liable to confiscation, it added. Senator Anusha Rahman further raised the question why the FBR was criminalising the tax matters and removing CrPC powers.