FBR Chief reveals Rs1.2 Trillion Tax Evasion amid Budget Reforms

ISLAMABAD: Chairman Federal Board of Revenue (FBR) Rashid Langrial has revealed that the wealthy class is involved in tax evasion worth Rs 1,233 billion.

He told the Senate Standing Committee on Finance that 5% of the country’s population is wealthy, who are subject to taxes of Rs 1,700 billion and pay only Rs 499 billion in taxes.

Chairman FBR said that instead of expanding the tax net, there is a need to collect more taxes from the wealthy class.

He said that despite the intense heat, 95 percent of people do not have air conditioners. The number of tax filers is 6 million. Despite the intense heat, 95 percent of people do not have air conditioners.

He said that the number of people under the age of 18 and the elderly is 132 million. This part of the country’s population is outside the labor force. A large number of women are unemployed despite being educated.

Concerns Over AML Notices

On this occasion, Saleem Mandviwala said that 250 companies have received anti-money laundering notices, and AML notices should not be given without the approval of the Minister and the Chairman.

Farooq H. Naik said that when a company receives an AML notice, institutions around the world start investigating. The company’s banking channels are closed upon the AML notices.

Shibli Faraz asked to be told how many cases were filed under AML and how many people were convicted.

In a continuation of its examination of the Finance Bill 2025–26, the Senate Standing Committee on Finance and Revenue met for the second consecutive day under the chairmanship of Senator Saleem Mandviwalla.

The meeting, held at the Parliament House, saw critical deliberations unfold around tax justice, policing of the Federal Board of Revenue (FBR), and a sweeping crackdown on tampered vehicles.

The session was attended by an ensemble of senior stakeholders, including Federal Minister for Finance and Revenue Muhammad Aurangzeb, Chairman FBR Rashid Mahmood Langrial, and Secretary Commerce Jawad Paul.

Senators Farooq Hamid Naek, Syed Shibli Faraz, Anusha Rehman, Ahmed Khan, Mohammad Abdul Qadir, among others. Senator Danesh Kumar and Senator Masroor Ahsab were also present

Chairman FBR Rashid Mahmood Langrial delivered a candid briefing, painting a picture of Pakistan’s wealth and tax disparity.

Ninety-five percent of Pakistan’s population cannot pay taxes. Only five percent control the wealth,” he revealed, adding that “the average annual income of the top 1% households is Rs. 10 million. The focus must shift from expanding the tax net to taxing the rich effectively, Langrial emphasized.

Other alarming figures shared during the briefing include 6 million registered tax filers, 132 million people under 18 or senior citizens, outside the labor force. 67 million unemployed, including a large segment of educated women.

Socially, indicating that despite the intense heat, 95% of Pakistanis don’t own air conditioners, the FBR Chairman pointed out.

Customs Act Amendments

During the clause-by-clause examination of the proposed amendments in the Customs Acts, 1969, was incorporated digital cargo tracking system (CTS) was incorporated to monitor the movement of imported, exported, transshipment, and transit cargo. The Cargo Tracking System will identify the movement of non-duty-paid or smuggled cargo through the use of technology while facilitating legitimate goods.

In another amendment on duties, no taxes will be demanded on imported goods valued below Rs. 5,000. This applies to goods sent through post or courier. It is proposed to revise the de minimis limit for courier parcels. The current limit of Rs. 15,000 may be reduced to Rs. 500. This change aims to prevent misuse of the de minimis facility for personal parcels.

A major flashpoint in today’s session was the proposed provision to grant arrest and money laundering notice powers to FBR officers.

Chairman Senator Saleem Mandviwalla warned, stating There’s a grave risk of misuse. Even a minor FBR officer sending a notice could create chaos.

He further emphasised that receiving a money laundering notice often leads to business shutdowns. Such notices should require the express permission of the Chairman FBR and the Minister.”

Senator Shibli Faraz echoed concerns, remarking This is turning Pakistan into a police state. Even taxpayers will flee.

Senator Farooq H. Naek underscored the impact of business because of the same ,stating AML notices aren’t trivial. They can cripple a businessman’s ability to import or export.

The Finance Minister Muhammad Aurangzeb acknowledged the apprehensions, stating that Money laundering notices are indeed a very serious matter and should be reviewed carefully under this provision.

Strict Action Against Tampered Vehicles

In a landmark move, the committee approved sweeping amendments to the Customs Act, 1969. These amendments target the issue of tempered and tampered chassis vehicles.

According to the new law, any vehicle with a tampered chassis number will be presumed smuggled. This also applies to vehicles with cut-and-weld modifications or re-stamped chassis. Even if such a vehicle is registered with any Motor Registration Authority, it will still be considered smuggled.

FBR Chairman Langrial clarified that Such vehicles will be confiscated and destroyed. They won’t be auctioned again. In principle, these vehicles should be set on fire to avoid resale of parts.”

The Standing Committee recommended that the confiscation and destruction of such vehicles must occur within 30 days of seizure.

Custom Duty Proposals by Stakeholders

Pakistan Poultry Association proposed an amendment to customs duty on grandparents’ chicks falling under PCT heading 0105.1100 may be brought down to zero percent

Similarly, the Sindh Chamber of Agriculture proposed an amendment to reduce the customs duty on imported tractors from 15% to 5%, and also for reconditioned tractors.

The Senate Standing Committee will reconvene on Sunday, June 15, at 2:00 PM to deliberate on the Customs Tariffs and Income Tax Ordinance 2001.