LAHORE: The Federal Board of Revenue has failed to recover Rs5.62 billion in taxes from 106 taxpayers across 14 field offices, with an audit report raising concerns over repeated weaknesses in the tax recovery system.
The taxpayers had taxable income listed under “Income from Other Sources,” including profit on debt and exchange gains, but failed to pay the tax reflected in their assessment records and financial statements, according to the audit.
The report found that FBR assessing authorities did not take timely legal action to recover the outstanding amounts, resulting in the non recovery of Rs5.618 billion in tax revenue. The audit recommended speeding up legal proceedings against the taxpayers and strengthening the FBR’s desk audit system.
FBR management told auditors that legal proceedings had been initiated, but the audit noted that no further progress had been reported by the time the audit was finalized.
The Departmental Accounts Committee, in meetings held in July and December 2025 and January 2026, directed the department to complete the legal proceedings and submit a compliance report to Audit and FBR.
The audit also recommended linking tax data with bank account numbers to identify income from profit on debt and calculate the applicable tax. It said penal action could also be taken against taxpayers under the law.
More significantly, the audit said the same irregularity has now appeared in five consecutive audit reports, raising concerns over the effectiveness of FBR’s tax enforcement and recovery mechanism.
The issue was previously highlighted in the audit reports for 2021 to 2022, 2022 to 2023, 2023 to 2024 and 2024 to 2025. The cumulative financial impact reported across those audits reached Rs. 53.748 billion.
The audit described the repeated occurrence as a matter of serious concern and called for stronger monitoring, desk audits and timely legal action to prevent further revenue losses to the national exchequer.
