KARACHI: A major tax evasion and money laundering scheme involving luxury watches has come to light, as smugglers use high-end timepieces to conceal illicit wealth and transfer funds abroad.
In a recent crackdown, the Federal Board of Revenue (FBR)’s Large Tax Office (LTO) raided three upscale watch retailers in Karachi, sealing them over massive tax violations. One of the targeted stores, “Collectibles” in Dolmen Mall, was found non-compliant with Point of Sale (POS) regulations, leading to the seizure of its sales and stock records.
Despite reporting only Rs65 million in sales over three years, actual revenue was estimated at Rs700 million, with individual watches priced between Rs2 million and Rs10 million. The declared stock value stood at just Rs40 million, raising suspicions of large-scale tax evasion.
Since a 25% sales tax applies to these luxury watches, authorities estimate that evaded taxes amount to approximately Rs180 million. The FBR has vowed strict legal action against those involved in this multi-billion-rupee fraud and money laundering operation.