The Federal Board of Revenue has officially initiated a specialized audit into the disbursement of cash rewards paid to customs officials and informers to identify potential misuse and recover funds from those who received inadmissible payments. This regulatory crackdown follows a directive from the Auditor General of Pakistan, who raised serious concerns regarding the lack of merit-based criteria in reward distribution over the last two fiscal years. The audit aims to scrutinize the entire lifecycle of reward sanctions—from detection to final realization—to ensure that public funds are only allocated for genuine, extraordinary services as defined by the Customs Reward Rules 2012 and the Inland Revenue Reward Rules 2021.
The FBR has mobilized a high-level audit team, supervised by the Chief of Legal, to conduct on-site inspections at the Collectorates of Customs Enforcement in Lahore, Multan, and Quetta. The scope of the investigation is extensive, covering all cases detected between July 2021 and December 2025. The primary objective is to categorize cases into those where rewards have been fully paid, partially disbursed, or remain pending despite being mature. The audit will also look into the Common Pool Fund and the Central Common Pool Fund to verify if the due shares have been correctly allocated to the relevant accounts and if individual officers and informers received their documented portions.
A critical aspect of the Terms of Reference for this audit is the verification of “meritorious services.” Under existing rules, cash rewards are only intended for exceptional performances, such as exceeding budgetary targets through extraordinary planning, expanding the tax base, or showing immense acumen in defending cases before legal forums. However, a recent report by the Auditor General revealed that in 40 specific cases involving 22 field offices, rewards totaling Rs 484.44 million were paid out without a clear determination of merit. These irregularities, highlighted during audits in late 2024 and early 2025, have prompted the board to demand a detailed justification for every sanctioned payment.
The audit team is also tasked with investigating complaints from various officers regarding the non-payment of their legitimate shares. It will examine why certain old, mature cases were not prioritized for disbursement, looking for patterns of favoritism or administrative negligence. In instances of partial payments, the team will determine the legality of such actions and identify which specific beneficiaries received funds while others were ignored. This granular data collection will include seizure dates, final adjudication timelines, and the exact amount of revenue realized, as rewards are legally only permitted after the actual recovery of duty and taxes.
The Departmental Accounts Committee has expressed dissatisfaction with the progress reported so far, leading to the current three-week deadline for the audit team to submit its findings. The Audit recommends not only the strict enforcement of the established criteria for future rewards but also the immediate recovery of inadmissible funds from the concerned officials. This move is seen as a necessary step to restore integrity to the enforcement mechanism and ensure that the reward system acts as a genuine incentive for performance rather than a facility for financial leakage.
This special audit signals a shift toward greater accountability within the country’s tax and customs apparatus. By identifying systemic gaps and holding individual officers accountable for inadmissible gains, the FBR intends to align its internal reward mechanisms with international standards of financial governance. The outcome of this report, expected within the month, will likely lead to further regulatory reforms and a more transparent process for acknowledging extraordinary devotion to duty within the revenue services.
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