The Federal Board of Revenue (FBR) has dismissed an Inland Revenue officer for gross negligence and inefficiency in handling one of Pakistan’s largest recorded tax fraud investigations, involving alleged fake and fraudulent sales tax refunds worth Rs238.4 billion. The dismissal follows a detailed disciplinary inquiry that revealed serious lapses in the officer’s performance and failure to carry out due diligence in a case that has drawn significant public and institutional scrutiny.
According to an official notification issued by the FBR, Altaf Hussain Khurho, serving as a Senior Auditor at the Regional Tax Office-I (RTO-I) Karachi, was found guilty of mishandling a critical investigation linked to M/s New Metro Footwear Co., Karachi, and 12 associated entities. The inquiry determined that Khurho failed to fulfill his professional responsibilities and did not adequately pursue key leads necessary to unearth the full scope of the alleged tax fraud.
The case first came to light in March 2024, when the Regional Tax Office registered an FIR (No. 01 of 2024) on March 26, 2024, after an intelligence alert from the Prime Minister’s Office raised concerns about irregularities and weak investigative follow-up. The FBR subsequently initiated disciplinary proceedings under the Civil Servants (Efficiency and Discipline) Rules, 2020, to determine the extent of procedural and ethical violations.
Aftab Alam, Director General of International Taxes Operations, was appointed as the inquiry officer to oversee the investigation into Khurho’s conduct. After reviewing the available evidence, statements, and case files, Alam submitted his report on July 17, 2025, concluding that the officer demonstrated clear inefficiency and failed to meet the basic standards of diligence expected in a case of such magnitude.
Initially, the inquiry committee recommended a minor penalty—specifically, the withholding of promotion for one year. However, subsequent reviews uncovered additional evidence suggesting deeper negligence in the handling of key aspects of the investigation. As a result, the disciplinary board decided to impose a more severe penalty, leading to Khurho’s dismissal from service.
The departmental report revealed that six individuals had received fraudulent sales tax refund claims totaling Rs197.27 million. Of this amount, Rs117.41 million was successfully recovered by the FBR, while Rs79.86 million remains unrecovered. The investigation highlighted that the auditor’s lack of proactive oversight allowed significant financial losses to persist and delayed recovery proceedings.
Despite Khurho’s defense that he had limited involvement and that some actions were outside his jurisdiction, the inquiry concluded that his failure to initiate timely verification and compliance checks contributed to the broader mishandling of the fraud case. The FBR emphasized that the officer’s inaction undermined institutional integrity and accountability, particularly in an area as sensitive as tax refund processing.
The case underscores the FBR’s renewed focus on internal accountability and governance reform. Over the past year, the revenue authority has intensified its crackdown on internal corruption, negligence, and misconduct among tax officials, aiming to rebuild public trust and ensure stricter compliance in tax administration.
Analysts believe this move signals a broader effort by the FBR to strengthen enforcement and transparency, especially in cases involving massive revenue leakages. The dismissal of a senior officer over procedural negligence reflects the growing emphasis on professional responsibility within Pakistan’s tax apparatus.
The FBR reiterated its commitment to maintaining institutional integrity, stating that it will continue to take action against officers found guilty of negligence, misconduct, or collusion in tax-related frauds. With this dismissal, the Board hopes to reinforce accountability standards across its regional offices and restore confidence in its investigative mechanisms.
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