Islamabad (Commerce Desk): An audit report issued by the Directorate General Audit Inland Revenue and Customs for the fiscal year 2024-25 has highlighted billions of rupees in tax irregularities, short recoveries, and weaknesses in the internal system of tax collection.
According to the audit report, various irregularities could result in the recovery of Rs323.34 billion for the national exchequer; however, only Rs43 billion was recovered between January and December 2025.
The report stated that a risk-based audit of FBR's income and expenditures was conducted, covering income tax, sales tax, federal excise duty, customs duty, and sales tax on services in Islamabad.
During the audit, FBR's internal control system was found to be weak and ineffective, while several financial irregularities were identified, including underreporting of revenues, short recovery of sales tax, federal excise duty, default surcharge, and penalties.
According to the report, 18 field offices failed to collect minimum tax amounting to Rs15.29 billion in 601 cases, while 19 field offices did not recover super tax worth Rs117.77 billion in 527 cases.
Similarly, 16 field offices collected Rs24 billion less income tax in 276 cases due to claims of unacceptable expenses. Billions of rupees in short recovery were also identified due to incorrect determination of taxable income, improper allocation of expenses, and input tax.
In the sales tax sector, irregularities amounting to Rs41.78 billion were reported in 159 cases due to inadequate monitoring of input tax credits of blacklisted taxpayers, while 20 field offices failed to collect Rs13.03 billion in sales tax across 870 cases.
According to the audit report, customs duty shortfalls of Rs3.56 billion were found in 9,831 cases due to incorrect classification of imported goods, under-valuation, and other shortcomings. The national exchequer also suffered losses due to ineffective tax exemptions, non-recovery of surcharges on delayed clearance of goods, and failure to sell confiscated items.
The report recommended that FBR strengthen its internal control system, establish an effective continuous monitoring mechanism to prevent irregularities, link taxpayer profiles with the return filing system, and improve the risk-based audit process for accurate determination of minimum tax and super tax.