Groups based in Karachi and other major cities are reportedly exploiting the tax relief scheme designed for FATA and PATA regions through fraudulent means, resulting in billions of rupees in losses to the national exchequer.
According to sources, these groups are taking undue advantage of the Peshawar High Court’s interim suspension of certain clauses of Customs General Order (CGO) No. 1 of 2021, enabling massive tax evasion.
The tax reliefs were originally introduced to promote employment and industrial activity in the former FATA and PATA areas. Under this scheme, industrial units established in those regions were granted exemptions from customs duty, sales tax, and income tax on the import of products such as textiles, edible oil, polymers, tea, and other goods.
However, sources revealed that import consignments are now being cleared at Karachi ports that have no practical connection with FATA or PATA. Last year, Customs Intelligence intercepted several such consignments imported in the name of FATA/PATA industrial units, which were later found stored in Karachi warehouses. These actions were led by then Additional Director Tauseef Gorchani and his team.
Following the court’s interim order, these shipments are once again being cleared. Chief Collector Enforcement Basit Abbasi has directed authorities to closely monitor the movement of these consignments to verify whether the goods actually reach their intended destinations in FATA or PATA.
Despite these instructions, enforcement faces hurdles due to the lack of GPS tracking and bonded carrier systems. Credible sources told Tijarat News that the court was misled, as the law allows clearance of these tax-exempt goods only within FATA or PATA, not in Karachi.
According to sources, an influential network is bypassing the system to evade billions in taxes. If this trend continues, not only will the FATA/PATA scheme’s revenue structure collapse, but investor trust in Pakistan’s special economic incentive policies will also erode.
FBR officials stated that the department is preparing a comprehensive report to present the facts before the court. However, internal circles within the FBR admit that balancing judicial directives, tax policy, and the influence of powerful mafias has become a major challenge for the institution.
