Key Takeaways
- Federal Tax Ombudsman directed FBR to investigate alleged racket.
- FBR has not initiated disciplinary proceedings or detailed investigation.
- Complainant calls for immediate action to hold officials accountable.
The Federal Board of Revenue (FBR) has delayed the implementation of the Federal Tax Ombudsman (FTO)’s recommendations, which directed a detailed investigation into an alleged nationwide racket involving the sale of non-customs paid goods. The matter was initiated following a complaint by Waheed Shahzad Butt against the Secretary of the Revenue Division.
According to Butt, tax fraud gangs were issuing invoices for non-customs paid products while misusing mobile SIM cards and bank accounts. He alleged that FBR ignored repeated written requests backed by evidence, including a sting operation to unmask the gang. The FTO directed FBR to investigate and report within one month, but no response was received.
In his findings, the FTO observed that the record revealed huge online transactions requiring thorough investigation. He held that FBR’s failure to pay any heed to the matter amounted to maladministration. The FTO directed FBR to initiate disciplinary proceedings under the E&D Rules 2020 against the officers responsible and to direct the Directorates of Intelligence & Investigation (Customs and IR) to conduct a detailed investigation.
Despite the FTO’s directives, FBR did not comply. Instead, it filed a review petition, seeking the withdrawal of only para 6(i), the disciplinary proceedings, and did not challenge the directions for investigation, follow-up action, and compliance reporting. A departmental representative tendered an unconditional apology and assured the FTO that FBR would be careful in future.
The 90-day compliance deadline has expired, yet no investigation report has been shared with the complainant or placed before the FTO, and no action has followed. Butt stated that the directions for investigation were never challenged by FBR itself and are final and binding. He added that non-implementation means the corrupt elements in field formations continue to sell non-customs paid goods openly and without any fear of accountability.
Butt further emphasized that the FTO must initiate defiance proceedings forthwith and make the investigation report public so that the officials who shielded this racket are brought to account. He stated that non-implementation deprives the exchequer of customs duty, sales tax, and income tax and makes a mockery of the Ombudsman’s institution.
The FBR’s inaction has raised concerns among tax authorities and the public, who fear that the racket continues unabated. The FTO’s directive remains unfulfilled, and the complainant is urging for immediate action to ensure accountability and transparency in the investigation process.
The delay in implementing the FTO’s recommendations has significant implications for the country’s revenue collection and the integrity of the tax system. The FBR’s failure to act promptly could lead to further erosion of public trust in the tax administration.
The FTO must initiate defiance proceedings forthwith and make the investigation report public so that the officials who shielded this racket are brought to account.
Waheed Shahzad Butt, Complainant
