FBR initiates special audit of cash rewards paid to taxmen, informers

ISLAMABAD: The Federal Board of Revenue (FBR) has started a special audit of cash rewards paid to the customs officials and informers to check any misuse of facility and recovery from tax officials, who obtained inadmissible rewards. The FBR has issued instructions to the Chief Collectors of Customs (Enforcement), Head and all members of the Audit Team and Collectors & Collectorate of Customs (Enforcement). The Auditor General of Pakistan (AGP) has asked the FBR to strictly follow the system of payment of cash rewards and monitor the enforcement of defined criterion of meritorious services. Despite such huge pendency of cases, cash rewards were also disbursed to the CIR (Appeals), its staff and departmental representatives responsible for pursuance of cases for early finalization at appropriate for a, the AGP added. The AGP has also directed recovery or rewards from tax officials in 40 cases where cash rewards were paid without determination of merit in accordance with reward rules during the last two fiscal years. READ ALSO: FBR approves increase in reward of IR officials The FBR has directed the FBR’s audit team that audit team to be supervised by Mr. Ashraf Ali, Chief (Legal), FBR is assigned to conduct audit of the case rewards sanctioned/disbursed/pending in the Collectorate of Customs (Enforcement), Lahore & Collectorate of Customs (Enforcement), Multan and Quetta. The audit team shall carry out audit of case rewards sanctioned/disbursed/pending pertaining to cases made/detected from July 2021 till December 2025 as per the following Terms of Reference (ToRs): – (i); List of all cases made/framed during the audit period where reward has become due/ payable. (ii); Cases where full amount of payable reward has been disbursed/paid (including informer, common pool fund-CPF & Staff). (iii); Cases where partial amounts have been disbursed/paid (specifying the amount & type of reward paid and pending i. e. CPF, informer or staff). (iv); Mature Cases where no reward has been disbursed/paid as yet and the dates on which the reward became payable. (v); Cases where reward has not become due. (vi); Verify whether due share of CPF and CCPF has been disbursed to relevant accounts. (vii); Verify whether the shares of staff/officers have been disbursed to each officer concerned in each case. (viii); Verify whether the share of informer has been paid/disbursed to the relevant officer/code of informer. (ix); Verify that all cases made during the audit period where reward has become due but not disbursed have been processed by the Collectorate and ready for sanction/disbursement. (x); Data of all mature reward cases where reward has been paid, partially paid, or not paid, the following details may be included seizure date, Date of final adjudication, amount of revenue/sale proceeds realized, date of realization of revenue/sale proceeds, amount of reward involved in each case and amount of CPF, informer and staff, separately. (xi); Data of cases not ripe for rewards shall include information regarding seizure No. & date, current forum of litigation, reasons of non-maturity for rewards, etc. (xii); The audit team shall verify the complaints of various officers/officials about non-payment of their share of case rewards despite being mature for long time and will determine why were old cases not prioritized for the purpose of disbursement of rewards. (xiii); In case of partial payments and processing of incomplete rewards (if any), the team will ascertain which part of the reward was not processed (CPF, staff, informer) and the beneficiaries and the amounts received in each case. The legality of processing partial rewards may also be determined. The Team shall complete the audit within three weeks of the issuance of this letter and submit its report to the Board, FBR added. According to the last report of Auditor General of Pakistan (AGP), under Rule 2(v) read with Rule 8(1) of the Customs Reward Rules 2012 and Rule 2(vii)-(viii), 6 & 7 of the Inland Revenue Reward Rules 2021, the calculation of reward in cases involving evasion of duty and taxes and confiscation of goods shall be sanctioned after the realization of the duty and other taxes involved. Furthermore, cash reward to the employees would be allowed on the basis of meritorious/extra-ordinary services performed. “Meritorious services” include exceptional performance like exceeding budgetary targets through extra-ordinary planning and efforts, displaying exceptional results in the recovery of arrears, enlarging the base of taxpayers, exceptional performance in defending cases before the ATIR, and displaying extraordinary devotion to duty and acumen towards making some original contribution. It was observed during audit of the fiscal years (2022-23) and (2023-24) that FBR (HQ) and its 22 field offices, in forty (40) cases paid cash reward to officers/officials in violation of reward rules. Cash reward was paid without determination of merit in accordance with aforesaid rules. This rendered payment of cash reward of Rs 484. 44 million as inadmissible. These irregularities were pointed out during February to November 2024. The department informed that reward was granted to employees based on meritorious services rendered by the officers/officials duly approved by the Board. The Departmental Accounts Committee (DAC) in its meetings held in July, October, November, December, 2024 and January, 2025 directed the department to provide detailed justification in line with criteria/circular issued by the Board for processing and sanctioning of reward. No further progress was reported till finalization of this report. The Audit recommends strict compliance of criteria laid down for disbursement of cash reward for meritorious services besides expediting recovery from the concerned officers/officials, the AGP added. Copyright Business Recorder, 2026

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