Islamabad, August 11, 2026: A Senate sub-committee has directed the Federal Investigation Agency (FIA) to investigate alleged irregularities involving consumption certificates worth Rs1.12 trillion issued to industries operating in tax-exempted areas, while also ordering a detailed audit of the tobacco industry and scrutiny of alleged tax evasion and misuse of tax exemptions.
The Sub-Committee of the Senate Standing Committee on Interior met at Parliament House to review matters relating to cigarette smuggling, consumption certificates, alleged misuse of tax exemptions and corruption in relevant departments.
The meeting was attended by Senators Talha Mahmood, Dilwar Khan, Bilal Khan and Haji Hidayatullah Khan.
The committee discussed the recovery of Rs1.12 trillion against consumption certificates issued to the tobacco industry and questioned the non-submission of complete details concerning certificates issued for goods imported for tax-exempted areas.
Officials informed the committee that the Peshawar High Court had ordered an audit before the issuance of consumption certificates and barred Pakistan Customs from encashing security cheques.
The convener directed the Federal Board of Revenue (FBR) to consider challenging the Peshawar High Court orders before the Federal Constitutional Court and submit a report to the committee.
The committee also questioned the leakage of Customs data to private media outlets, observing that such leakage could not occur without the involvement of Customs officials.
The FBR informed the committee that an investigation into the data leakage was under way. The convener directed the FBR representative to take strict action against officials found involved in the leakage and submit a report.
The committee questioned authorities about individuals who had applied for consumption certificates and sought details of cases pursued by the department before constitutional courts.
The FIA informed the committee that a team had been constituted to investigate the matter.
Senator Talha Mahmood said the FIA could facilitate the issuance of consumption certificates if the matter was pursued seriously. He alleged that some industrialists were operating multiple factories, with one located in a tax-exempt area and another in a settled area, while certain Customs officials were allegedly facilitating such practices.
He recalled that Pakistan Customs had previously introduced tracking chips on containers to monitor their movement and verify whether imported goods reached their declared destinations. He stressed the need for effective monitoring mechanisms to prevent the misuse of tax exemptions and smuggling-related irregularities.
Senator Bilal expressed concern over inadequate industrial development in Balochistan and said legitimate commodities were sometimes treated as smuggled goods despite the sealing of the province’s borders.
The convener directed the FIA to issue letters to all factories operating in tax-exempt areas, seeking details for the last 20 years regarding imported materials, consumption, brand names and taxes paid.
The committee also ordered a comprehensive audit of the tobacco industry covering raw materials imported for cigarette manufacturing, production volumes, brands, prices and taxes paid.
According to the briefing, 95 per cent of the imported raw materials used in cigarette manufacturing were associated with Pakistan Tobacco Company (PTC) and Philip Morris Pakistan.
The committee was informed that Pakistan Inland Revenue had issued consumption certificates worth Rs378 billion. The convener directed the authorities to provide bank and account details of companies in whose names the certificates had been issued.
The sub-committee was briefed on the consumption of major raw materials imported by tobacco companies.
Officials said approximately 20,002 metric tons of acetate tow had been imported, with 97 per cent accounted for by two major companies and the remaining 3 per cent by other companies.
Approximately 15,639 metric tons of tobacco paper had also been imported, including 10,840 metric tons by PTC and 3,118 metric tons by Philip Morris, with the remaining quantity imported by other companies.
Regarding filter rods, the committee was informed that approximately 533 metric tons had been imported, of which 96 per cent was accounted for by two companies and 4 per cent by other companies.
In aggregate, the briefing indicated that PTC and Philip Morris accounted for approximately 94 per cent of the imported materials consumed by the tobacco industry, while local companies accounted for the remaining 6 per cent.
The convener expressed concern that relevant departments had failed to provide complete and consolidated information to the committee.
Officials further informed the committee that PTC and Philip Morris did not fall under the jurisdiction of Regional Tax Office (RTO) Peshawar. PTC was under Large Taxpayer Unit (LTU) Islamabad, while Philip Morris was under LTU Karachi.
The committee directed the concerned RTOs and LTUs to furnish complete details of taxes collected and imported materials relating to the two companies.
The committee was also informed that four illegal cigarette manufacturing units operating in Khyber Pakhtunkhwa had recently been sealed. It directed the authorities to submit complete details of all companies operating under the jurisdiction of RTO Peshawar.
The convener also directed the concerned authorities to provide the formula used for calculating taxes on cigarettes.
Senator Talha Mahmood recommended the formulation of business-friendly policies to encourage tax compliance while reducing opportunities for bribery and corruption.
The sub-committee also examined allegations of corruption and theft involving officials. Three investigating officers — Shahzaib Ali, Fakhar Gondal and Christopher — who were allegedly involved in corruption were presented before the committee.
Officials informed the committee that 22 people were allegedly involved in theft incidents, of whom 11 had been apprehended.
The committee directed the relevant authorities to provide details of assets beyond known sources of income of the accused officials, along with forensic examination reports of their mobile phones.
Senator Talha Mahmood recommended that the corruption case be taken up by the main Senate Standing Committee on Interior.
The sub-committee appreciated the submission of consumption data for the period from 2018 to 2026 and directed the concerned departments to provide corresponding records for the period before 2018.
Officials of the National Highways and Motorway Police also attended the meeting. The convener pointed out discrepancies in figures presented to the committee concerning people allegedly involved in the theft incidents.
While one briefing stated that 22 people were involved, the Inspector General of the National Highways and Motorway Police reported that 11 people had been apprehended.
The committee sought clarification of the discrepancy and directed the concerned authorities to provide an accurate and consolidated position.
Expressing serious concern over the matter, the committee directed that a letter be sent to the Ministry of Communications regarding the allegedly misleading statement made before the committee. It also directed that the matter be referred to the Senate Privileges Committee.
The sub-committee reiterated that all relevant departments must ensure transparency, accountability and effective monitoring mechanisms to prevent misuse of tax exemptions, illegal imports, corruption and other irregular practices.
