FBR tells Senate panel tobacco tax theft is Rs40bn, not $1bn

ISLAMABAD: The Federal Board of Revenue (FBR) on Thursday told a Senate sub-committee that estimated tax theft in the tobacco sector is around Rs40 billion annually — far below the government’s public claim of $1bn, or roughly Rs280bn.

The admission came during a meeting of the Senate Standing Committee on Interior and Narcotics sub-committee, convened by Senator Saifullah Abro to review smuggling, of narcotics, misuse of tax-exempt imports, and FBR enforcement.

Senator Abro questioned FBR officials over government advertisements claiming $1 billion in annual tobacco tax evasion. FBR officials clarified the actual estimated evasion is about Rs40bn. They also said they were unaware of the nationwide anti-tax theft campaign being run by the federal government.

Expressing displeasure, the convenor said public awareness campaigns must be based on “accurate and verifiable information”. He directed FBR and relevant authorities to bring the discrepancy to the prime minister’s notice and correct the advertisements.

“This is alarming, how FBR briefed the prime minister and the Ministry of Information regarding tax theft,” Senator Abro said. The committee was briefed that FBR has seized 16 tobacco factories on charges of tax fraud. Members were also briefed on the regulatory framework for the industry.

The panel examined allegations that raw materials imported for tax-exempt areas are being diverted and consumed elsewhere, causing major revenue losses.

Senator Abro directed all departments to submit detailed proposals and complete information at the next meeting.

The Federal Investigation Agency briefed the committee on progress in a case involving theft of 2,828 cartons of cigarettes. Senator Abro assured full support to investigators and directed strict action, including arrests, against all involved — even senior FBR officials if found responsible.

Senator Aamir Waliuddin Chishti and Senator Hidayatullah Khan attended the meeting as special invitees. Senator Abro also criticised the absence of senior officials from key departments, stressing that leadership must ensure institutions function effectively when matters of national revenue are under discussion.

Concluding the meeting, the committee directed all departments to submit comprehensive records of smuggling and tax evasion cases. Members reaffirmed support for enforcement agencies and said all guilty parties must be brought to justice “without discrimination”.

Published in Dawn, June 19th, 2026