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FBR Chairman Admits Corruption in Department

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Federal Board of Revenue (FBR) Chairman Rashid Langrial acknowledged ongoing corruption within the department on Tuesday. He made the admission during a briefing to the National Assembly’s Standing Committee on Finance. Langrial also shared details about new reforms to expand the tax base and curb illegal practices.

FBR Implements Reforms to Tackle Tax Evasion

Rashid Langrial stated that changes in tax laws aim to target high-income earners and businesses engaging in significant transactions. Under these reforms, FBR officers have been granted additional powers to address black money and tax evasion.

Non-filers will face restrictions on economic activities like purchasing vehicles, property, and making investments. Langrial emphasized that this step would formalize business activities and curb the black economy.

The government has also empowered the cabinet to recruit auditors to strengthen tax collection. A detailed review of these measures will be conducted by the cabinet before final implementation.

Challenges in Tax Revenue Collection

Langrial admitted that tax revenue growth has not kept pace with inflation and economic expansion. He pointed out that tax collection in 2024 is at the same level as in 2008. He highlighted the increase in income and sales taxes, which have significantly impacted salaried individuals.

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Despite the measures, the chairman expressed concerns that the reforms might create additional problems. He noted the pressures caused by foreign exchange shortages and said the public would likely face challenges under the current system.

Finance Minister of State, Ali Pervez Malik, supported these reforms. He stressed the importance of addressing issues like black money in the tourism economy and vehicle purchases to ensure economic sustainability.

Criticism Over Corruption and Transparency

Committee member Hina Rabbani Khar criticized the persistent corruption within the FBR. She emphasized the need for a more transparent tax system. She also condemned the authority given to block citizens’ bank accounts, calling it unfair and counterproductive.

Khar urged the government to create an effective and transparent framework to restore public confidence. The committee raised concerns over the negative impact of the reforms on ordinary citizens and questioned the department’s ability to achieve its goals amid ongoing corruption.

The discussion highlighted the challenges the FBR faces in implementing reforms while addressing public concerns. The government’s efforts to formalize the economy and tackle tax evasion continue to face scrutiny from lawmakers and citizens alike.

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