ISLAMABAD: The Federal Board of Revenue (FBR) suffered a revenue shortfall of nearly Rs. 118 billion in super tax over the past two years due to flaws in its tax assessment system and return-filing mechanism, according to the Auditor General of Pakistan’s Audit Report 2024-25.
The audit report revealed that the FBR’s electronic tax return system does not automatically calculate super tax accurately because it fails to include all relevant sources of taxable income when determining tax liability.
As a result, 527 large taxpayers did not pay the required super tax, leading to an overall shortfall of Rs. 117.78 billion. The audit also identified serious irregularities in the assessment and recovery of super tax across 19 FBR field formations.
The Auditor General noted that these weaknesses have repeatedly resulted in the under-assessment and under-recovery of super tax over several years, despite being highlighted in previous audit reports.
Responding to the audit observations, the FBR stated that legal proceedings have already been initiated in cases involving Rs. 71.21 billion in unpaid super tax. It added that cases worth another Rs. 46.56 billion are currently pending before the courts, delaying the recovery process.
The Departmental Accounts Committee (DAC) has directed the FBR to expedite legal proceedings and submit a compliance report to the audit authorities.
The Auditor General recommended that the FBR upgrade its tax return filing system to ensure the automatic and accurate calculation of super tax by incorporating all taxable sources of income, aiming to prevent similar revenue losses in the future.
The report further observed that the recurring issue of under-recovery of super tax points to unresolved systemic weaknesses within the FBR’s tax administration framework.
