ISLAMABAD: A government audit has identified tax irregularities, under-assessments and weak internal controls amounting to Rs323.34 billion in the Federal Board of Revenue (FBR), while only Rs43bn was recovered during the audit period, according to the Directorate General Audit Inland Revenue and Customs’ report for the fiscal year 2024-25.
According to mainstream media reports, recoveries worth Rs323.34bn were identified because of various irregularities, but only Rs43bn was recovered between January and December 2025.
According to the audit report, auditors carried out a risk-based review of the FBR’s revenue collection and expenditure, covering income tax, sales tax, federal excise duty, customs duty and sales tax on services in Islamabad.
The audit found that the FBR’s internal control system remained weak and ineffective, resulting in widespread instances of under-reported revenue, short recovery of sales tax, federal excise duty, default surcharge and penalties, among other irregularities.
The report said 18 field offices failed to recover Rs15.29bn in minimum tax across 601 cases, while 19 field offices did not collect Rs117.77bn in super tax in 527 cases.
It further stated that 16 field offices under-assessed income tax by Rs24bn in 276 cases due to inadmissible expense claims. Billions of rupees in additional short recoveries were also attributed to incorrect determination of taxable income and improper allocation of expenses and input tax.
In the sales tax regime, the audit reported irregularities worth Rs41.78bn in 159 cases due to inadequate monitoring of input tax credits claimed by blacklisted taxpayers. It also found that 20 field offices failed to recover Rs13.03bn in sales tax in 870 cases.
The report highlighted further revenue losses in the customs sector, where misclassification and under-valuation of imported goods resulted in the short recovery of Rs3.56bn in customs duties across 9,831 cases.
It added that additional losses to the national exchequer stemmed from inadmissible exemptions from duties and taxes, failure to recover surcharges on delayed clearance of warehouse goods, and the non-disposal of confiscated goods.
The audit recommended that the FBR strengthen its internal control mechanisms, establish a permanent monitoring system to prevent irregularities, integrate taxpayers’ profiles with the return filing system, and enhance risk-based desk audits to improve the assessment and collection of minimum tax and super tax.
