ISLAMABAD: The Federal Board of Revenue (FBR) has introduced major changes in tax laws to check tax frauds with increased penalties on “abettors” of such frauds.
According to the Finance Bill (2025-26), the government is actively combating tax fraud through a range of policy and administrative measures. These efforts include enhancing enforcement mechanisms to identify and prevent tax evasion and imposing tougher penalties to serve as a deterrent. Likewise, distinguishing between civil and criminal liability improves the likelihood of winning cases at appellate fora. Following measures are proposed in this regard, namely:
(a) The existing legal provisions does not envisage the role of an ‘abettor’ who connives with the registered persons involved in fraudulent activities to evade the sales tax. Now, the term “abettor” is proposed to be defined and punishment for this offence is also proposed.
(b) Tax fraud is currently defined under clause (37) of section 2. The scope of this definition is broadened to cover all kinds of frauds including those involving technology.
(c) A number of amendments are introduced in penalty section of law to discourage tax fraud.
(d) A clear distinction has been created in the law for proceeding against the non-compliance and tax frauds. The cases involving tax frauds shall be prosecuted before the special judges based on the inquiry and investigation by the department and the final decision shall be taken by a judge instead of an officer of the department.
Copyright Business Recorder, 2025
