- Pakistan has introduced Sections 37A and 37B in the Sales Tax Act, 1990, effective July 1, 2025, to combat tax fraud.
- These sections empower Inland Revenue officers to investigate, detain, and prosecute individuals or companies suspected of tax fraud.
- Section 37A allows officers to initiate inquiries with material evidence, summon documents, examine individuals, and arrest suspects.
- A three-member FBR committee can authorize arrests for fraud over Rs. 50 million if the accused avoids notices or tampers with evidence.
- Company directors and officers can be held accountable for their company’s tax offenses.
- Section 37B requires notifying a Special Judge after an arrest, who decides on bail or custody.
- The accused must be presented in court within 24 hours, and bail is not guaranteed.
- FBR defends these provisions, stating they aim to deter fraud and ensure tax collection.
- The business community is concerned about potential harassment of legitimate businesses.
Source: pkrevenue.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
