ISLAMABAD: A Senate panel on Tuesday questioned the legal basis of the Federal Investigation Agency (FIA) launching independent tax inquiries — a domain of the Federal Board of Revenue (FBR) — and directed both institutions to evolve a synchronised operational mechanism to avoid jurisdictional overlap.

The panel also raised alarm over massive irregularities in tax-exempted tribal areas causing an estimated $1 billion annual loss to the national exchequer, as lawmakers lambasted investigation agencies for booking truck drivers while letting powerful factory owners go scot-free.

The Senate Standing Committee on Interior and Narcotics Control, chaired by Senator Faisal Saleem Rehman, reviewed the sub-committee report by Saifullah Abro on tax evasion, illicit cigarette manufacturing, and smuggling operations in the former Fata and Pata regions.

Senate panel raises alarm over $1bn annual loss in tribal areas

According to the report, factories operating in the tax-exempted areas of Fata, Pata and Khyber Pakhtunkhwa were involved in systematic trade malpractices and evasion worth over Rs1,120bn.

The committee also took serious notice of the theft of 2,828 cartons of confiscated cigarettes from FBR warehouses and the subsequent FIR registered by the FIA.

Members expressed strong dissatisfaction over the FIR nominating only low-ranking officials. “Why are notices being issued across a Rs1,120bn tax-exempted zone while the real factory owners are spared and only drivers are arrested?” members questioned.

Senator Talha Mahmood pointed out procedural flaws in case registration, saying key figures identified in preliminary inquiries were mysteriously excluded from final challans. Scrutiny of FBR’s warehouse protocols revealed even more alarming gaps — missing CCTV cameras, non-existent inventory ledgers, and unverified handovers of seized contraband.

Briefing the committee on anti-smuggling powers, the Minister of State for Interior Talal Chaudry and ministry officials said the Frontier Corps and Pakistan Rangers had been delegated anti-smuggling authority in border zones of Fata and Pata due to the complex law and order situation.

The committee decided to constitute a new sub-committee to further investigate the tax evasion racket and directed the FBR and FIA to submit comprehensive inquiry reports within one month along with verified physical stock registers of all seized goods.

On a separate agenda, the committee reviewed Rule 18 of the Passport Rules 2021, dealing with Emergency Travel Documents (ETD) for repatriation of stranded and deported Pakistanis. Chairman Faisal Saleem Rehman questioned inordinate delays in national status verification and family tree attestation involving foreign missions and the Intelligence Bureau.

He also flagged complaints from the Pakistani diaspora that embassies abroad were issuing passports for only one to three years instead of the standard five-year validity. He informed the committee that he had tabled a legislative bill in the Senate to reform passport rules and simplify procedures for overseas Pakistanis.

Published in Dawn, September 23rd, 2026