The Federal Board of Revenue (FBR) has uncovered a scheme involving the alleged manipulation of old wealth statements, with 85 taxpayers found to have revised historical declarations to incorporate unexplained assets worth Rs9.41 billion into their declared wealth. The case was detected by the Directorate General of Intelligence and Investigation (Inland Revenue) through an analysis of FBR’s database, with technical support from Pakistan Revenue Automation Limited (PRAL). The FBR said a criminal case has already been registered under the Anti-Money Laundering Act, 2010, while further proceedings are being processed against other cases identified during the investigation.
According to the FBR, the taxpayers involved amended wealth statements between March 2025 and June 2026 for tax years ranging from 2014 to 2019. The revisions reportedly introduced assets that had not appeared in the taxpayers’ earlier declarations, including cash, physical gold, prize bonds, properties and business capital. The tax authority said the changes were identified through data analysis and that the revisions were made outside the period permitted under the relevant tax law. The findings have prompted criminal inquiries as authorities examine how previously unexplained assets were incorporated into wealth statements several years after the original declarations.
The FBR pointed to the explanation to Section 116(3) of the Income Tax Ordinance, 2001, which restricts the revision of a wealth statement beyond five years after the due date of the original return. According to the tax authority, every revision identified in the scheme fell outside this prescribed period. The use of historical wealth statements to introduce assets at a later stage therefore became a central element of the investigation. The FBR’s data analysis, supported by PRAL, enabled investigators to compare previous declarations with subsequent amendments and identify changes that raised questions about the source and timing of the assets included in the revised statements.
One case registered by the Directorate of Intelligence and Investigation (Inland Revenue) Lahore illustrates the nature of the alleged manipulation. According to the FBR, a taxpayer in the Lahore region revised his tax year 2015 wealth statement in May 2026 and inserted fictitious funds amounting to Rs102.8 million. The amount was subsequently carried forward through his wealth statements up to tax year 2025. The taxpayer then used the funds to provide a financial explanation for the purchase of seven properties with a combined value of Rs64.41 million. The properties were purchased during May and June 2026, while the taxpayer was unable to provide an explanation for the source of the funds when questioned by investigators.
The FBR said the amount of tax allegedly sought to be evaded in that individual case exceeds Rs46 million. Beyond the Lahore case, Regional Directorates of Intelligence and Investigation (Inland Revenue) have opened 48 criminal inquiries across the country as authorities investigate the wider wealth statement manipulation scheme. Proceedings in the remaining identified cases are also underway. The investigations are intended to establish how the undeclared or unexplained assets were subsequently incorporated into wealth declarations and whether other individuals or parties assisted in the process.
The money laundering case registered by the authorities names the taxpayer involved as well as any abettors who may be found to have participated in the alleged activity. The FBR said additional cases were being prepared as investigations progress, with authorities seeking to identify all individuals connected with the scheme. The tax authority has maintained that wealth declarations must accurately reflect taxpayers’ financial positions and cannot be used to retrospectively provide legitimacy to assets whose sources were not previously disclosed or explained.
The FBR also said it would continue using data analytics to identify irregularities and potential manipulation within the tax system. The authority stated that the tax system would not be allowed to become a channel for legitimising unexplained wealth and warned that individuals involved in such practices could face penalties and prosecution. The latest investigation highlights the increasing use of digital records and database analysis by tax authorities to compare historical declarations, identify unusual amendments and support enforcement proceedings involving potential tax evasion and money laundering.
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