AGP report: Tax evaders drain hundreds of billions annually

ISLAMABAD: At a time when Pakistan desperately needs to increase its revenues and broaden its tax base, tax evaders continue to siphon off hundreds of billions of rupees with virtual impunity, while the Federal Board of Revenue (FBR) routinely fails to enforce the law.

This stark picture emerges from the Auditor General of Pakistan’s latest report for the fiscal year 2024-25, which has documented tax evasion and enforcement lapses costing the nation hundreds of billions every year.

The report points to thousands of cases where the taxpayers are involved in widespread under-reporting, bogus claims, non-filing of returns, misuse of tax credits, and concealment of income. These tax evaders are encouraged by poor monitoring, delayed action, and weak internal controls across the FBR’s network of field offices.

Despite repeated findings of similar irregularities in previous years, the report notes that no significant corrective action has been taken - a pattern the Auditor General calls “a matter of serious concern.”

Super tax is massively dodged by the wealthy. Reading of the report shows that most troubling is the evasion of super tax - a levy on high-income earners making over Rs150 million annually. According to the report, 1,026 taxpayers failed to pay super tax, costing the exchequer Rs167.9 billion. The FBR, despite having the legal authority and mechanisms to enforce payment, did not initiate timely proceedings, allegedly due to weak monitoring. O