ISLAMABAD: The Federal Tax Ombudsman (FTO) has uncovered another network of cybercriminals operating within the Federal Board of Revenue (FBR) and Pakistan Revenue Automation Limited (PRAL) that was involved in the fraudulent filing of sales tax returns and revised returns through fake and flying invoices showing fictitious supplies.
The FTO issued strict directions to the FBR to take immediate action against those involved in the fraud, including both the cybercriminals and the beneficiaries who gained from the illegal activity.
In its order, the FTO expressed serious concern over repeated incidents of hacking into taxpayers’ password IDs, terming them a reflection of weak data security and compromised integrity of the IT systems. The order highlighted critical deficiencies such as inadequate data protection, weak internal controls, lack of effective system alerts for suspicious activity, and unauthorized changes to taxpayers’ profiles, all of which facilitated the creation of fake transactions and manipulation of records.
According to the order signed by the newly appointed FTO, the complainant’s password ID was illegally misused to file fraudulent sales tax returns and revised returns for the tax periods from July 2024 to June 2025 on a recurring monthly basis. Fake supplies were introduced through Annexure C, creating complications for filing sales tax returns in subsequent periods. The FTO ruled that these actions constituted maladministration.
The FBR has been directed to instruct Chief Commissioners of Inland Revenue at RTOs in Multan, Peshawar, Quetta, Faisalabad, Lahore, Rawalpindi, Sahiwal, RTO-I Karachi, RTO-II Karachi, as well as CTOs in Islamabad and Lahore and LTOs in Lahore and Islamabad, to ensure compliance with the order.
The FTO further directed the FBR to initiate legal proceedings for conviction against the beneficiaries of the tax fraud already identified and communicated by the Ombudsman’s office through a letter dated October 29, 2025, followed by a reminder on November 19, 2025. These proceedings are to be carried out in accordance with the Board’s instructions issued on September 7, 2023, under Sales Tax General Order No. 12 of 2023, which outlines standard operating procedures for dealing with cases involving fake and flying invoices.
The FBR has also been instructed to identify additional beneficiaries further down the supply chain and immediately share details of such cases with the relevant jurisdictions for legal action, to be pursued by the respective Commissioners as per existing instructions.
In addition, the FTO has directed the Director General Intelligence and Investigation (I&I) to identify the cybercriminals, whether operating from within or outside the FBR and PRAL, who used specific IP addresses to inject fake supplies into the supply chain, and to proceed against them for conviction under the law.
Separately, the FTO has instructed the Chief Executive Officer of PRAL, Islamabad, to remove a specific link incorporated in the 181-registration form under the name Muhammad Sohail Ajmal, or alternatively to enable the Local Registration Office at RTO Bahawalpur to remove the link, as the office is currently unable to do so on its own.
