ISLAMABAD: A Senate sub-committee has raised serious concerns over the Federal Board of Revenue (FBR) for failing to effectively monitor the sale of goods manufactured in tax-free zones of the erstwhile tribal areas and supplied to tariff areas across Pakistan.
The concerns were voiced during a meeting of the Sub-Committee of the Senate Standing Committee on Interior and Narcotics Control, chaired by Senator Saifullah Abro, with committee members Senator Muhammad Talha Mahmood and Umer Farooq in attendance.
The committee reviewed the issue of the theft of 2,828 cartons of cigarettes from FBR warehouses located in Swabi and Mardan, while also examining the broader issue of weak regulatory control over products originating from tax-exempt zones.
Senator Saifullah Abro expressed dissatisfaction with the performance of Pakistan Customs, particularly over the absence of a proper monitoring system for goods sold from tax-free zones in the former FATA region. He observed that several business entities had set up manufacturing units in these concessionary areas, but instead of serving underprivileged local populations, their products were being distributed nationwide.
He further criticized the misuse of tax exemptions in areas such as Malakand and the erstwhile tribal belt, stating that the purpose of such incentives was to uplift local communities. However, according to the committee, industrial units were allegedly exploiting these concessions by selling goods across Pakistan rather than restricting their benefits to designated tax-free areas.
During the meeting, officials from the Federal Investigation Agency (FIA) briefed the committee on the investigation into the cigarette theft. They stated that the warehouse security guard had been questioned but denied all allegations, claiming he never possessed the warehouse keys. The FIA also informed the panel that the warehouse in charge had not been formally deputed by the department, describing it as a serious administrative lapse.
The committee chairman also expressed strong displeasure over the absence and lack of seriousness shown by some officials, remarking that officers willingly accept senior posts but fail to attend critical parliamentary meetings. He directed authorities to submit complete documentation related to the import of machinery by Paramount Tobacco Company.
Officials from RTO Peshawar informed the committee that the company had declared the value of its machinery at Rs3.5 million in its 2018 tax returns. They added that such industrial units often purchase second-hand machinery and refurbish it for operational use.
The Senate sub-committee showed dissatisfaction with the incomplete details furnished by the FIA, which assured members that a more comprehensive report would be presented in the next meeting.
The panel also discussed delays in obtaining statements from the tobacco company. FIA officials stated that although the company owner had been summoned, he had filed a petition before the High Court, alleging harassment by the agency. Senator Abro directed that any individual failing to appear before the FIA after being summoned should be arrested after seven days in accordance with the law.
An FBR member told the committee that tracing the ultimate beneficiaries of the stolen cigarette cartons would be crucial in solving the case.
Meanwhile, Pakistan Customs briefed the panel on anti-smuggling measures being taken across the country, while noting that a large share of smuggling activity takes place in Balochistan.
The committee directed Pakistan Customs to submit complete details of all seized goods lying in Khyber Pakhtunkhwa and Balochistan from 2012 to date, along with records identifying the beneficiaries involved in smuggling during the same period.
Senator Talha Mahmood stressed that no verbal explanation regarding the imported machinery would be accepted and instructed authorities to submit all details in writing.
The committee also sought detailed information from the FBR regarding smuggled goods, particularly cosmetics and skimmed milk, noting that such products are largely consumed in Punjab. Authorities were further directed to provide a complete record of confiscated goods stored in warehouses and airports from 2012 to 2026.
The sub-committee ordered all relevant departments to submit complete records and a progress report in the next meeting.
In a stern warning, Senator Talha Mahmood directed that if the tax officials involved fail to appear before the committee by April 2, they should be arrested immediately. He also demanded that the officials be produced before the committee in handcuffs if necessary.
