ISLAMABAD: Federal Board of Revenue (FBR) has suspended some officers who were deployed on sugar mills over suspicious activities.
According to the Chairman of FBR, the institution is completely monitoring the sugar mills, some officers were not working properly which led to their suspension. There is an expectation of collecting Rs 160 billion of sales tax from sugar sector this year.
Chairman FBR said that last year they collected Rs100 billion of sales tax from the sugar sector. This year the last date for filing tax return is 30th September, It is also expected that this year the numbers of filers can reach 60 lakh.
Earlier: The National Assembly’s Standing Committee was briefed on the ongoing FBR sugar investigation, with the tax authority confirming that 14 of its officials have been suspended over alleged involvement in the illegal release of sugar.
The panel, headed by Atif Khan, has sought the names of sugar mill directors with at least 20% shares from the Securities and Exchange Commission of Pakistan (SECP) after reports of Rs300 billion in windfall profits from price manipulation.
Price Manipulation and Supply Shortage
Officials from the Ministry of Industries and Production told the committee that millers and dealers inflated prices after the sugar export deadline expired, earning an estimated $440 million from exports. Although sugarcane cultivation in the 2024-25 season rose 1.11%, heatwaves and crop disease lowered yield and sucrose recovery, cutting production to 5.862 million metric tons, about 1 million tons less than last year. With carryover stocks of 0.5 million tons, total availability barely met domestic demand, driving early 2024 price hikes.
Failure to Maintain Agreed Prices
Despite an agreement with the Pakistan Sugar Mills Association (PSMA) to cap ex-mill prices at Rs159 per kilogram and retail prices at Rs164 until April 19, 2025, millers raised prices in May, ignoring ministry warnings. The FBR revealed that some sugar bags were released without mandatory track-and-trace stamps, allegedly involving mill-deployed officials. Several trucks carrying unstamped sugar have since been seized, while sales tax on sugar has climbed to Rs100 billion from Rs65 billion last year despite lower production.
Prime Minister Shehbaz Sharif has formed a special monitoring team, and the committee will summon SECP officials to disclose sugar mill ownership details and examine potential political links as part of the broader FBR sugar investigation.
