Tax evasion in Pakistan’s poultry and tobacco sectors has reached nearly USD 1.43 billion, underscoring significant gaps in the country’s tax collection system, Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial revealed.
He noted that the poultry sector, which should be contributing USD 35.67 million in taxes, currently only pays USD 4.64 million.
Despite its high-profit margins, the poultry industry—where chicks purchased for USD 0.25-0.29 are sold for as much as USD 0.64—has been underreporting income due to the absence of proper cost accounting in income tax returns, as reported by Pakistan Today.
The FBR’s market intelligence suggests that daily poultry production ranges between 800,000 and 900,000 chicks, but weak financial transparency results in substantially lower tax collections than expected.
Officials estimate that the poultry sector owes around USD 534.95 million in unpaid taxes over the past five years, with annual liabilities reaching USD 107 million.
Mr Langrial acknowledged that when the FBR acts, the sector’s declared sales prices are often altered, which complicates enforcement.
However Standing Committee Chairman Syed Naveed Qamar cautioned that the new powers granted under an ordinance could lead to increased harassment of businesses.
Mr Langrial, however, maintained that these steps were necessary to close the significant tax gaps and ensure fair tax collection across industries.