Copyright brecorder
ISLAMABAD: Prime Minister Shehbaz Sharif on Thursday ordered an international forensic audit of the Pakistan Revenue Automation Limited (PRAL) system following the exposure of a massive sales tax fraud scheme, which allegedly siphoned billions of rupees from the exchequer. During a high-level review meeting on Federal Board of Revenue (FBR) reforms, the prime minister was briefed on the full scope of the scam, which had been enabled by PRAL’s outdated technology and weak oversight mechanisms. The fraud, spanning several years, involved fraudulent practices such as fake invoicing, inflated tax returns, and manipulated records, all of which went undetected due to a lack of real-time monitoring and inadequate data protection. USD11bn discrepancy in data: PRAL reports incomplete import data to PBS Describing the incident as “unacceptable,” Sharif directed that all responsible parties, including companies, individuals, and institutions, be identified and held accountable. The investigation, which is set to conclude within three weeks, will pave the way for legal action. Sharif also instructed the FBR officials to trace the fraud’s impact across sectors, including textiles, construction, and import-export businesses, which are believed to have been heavily affected. Officials informed the prime minister that PRAL’s obsolete digital infrastructure, lacking real-time tracking and robust security features, had allowed the fraudulent activities to persist. A fact-finding committee confirmed that system failures were at the heart of the scandal, but also noted that the government was already addressing these weaknesses through ongoing reforms. New upgrades to the PRAL system now include an audit vault, a database protection wall, and a security operations centre, as part of efforts to modernize Pakistan’s tax infrastructure. The revamped system also tracks user IP addresses whenever data is altered, making it significantly harder for fraud to go unnoticed. Sharif praised the FBR’s reform efforts, particularly highlighting the international recognition the board received at the World Bank Annual Conference in Washington. The meeting, which also included key ministers such as Azam Nazeer Tarar, Muhammad Aurangzeb, Musadik Malik and Ataullah Tarar, underscored the importance of these reforms in transforming Pakistan’s tax system into a more transparent and efficient structure. Copyright Business Recorder, 2025
