This year, the Government of Pakistan announces various state Awards such as Sitara-e-Jurat, Hilal-e-Imtiaz, etc., to at least 355 National Heros from different chapters of life, who work for the progress and development of the beloved country, Pakistan. Every Pakistani appreciates them from the bottom of their heart.
But the surprising thing is that while the names of capable and worthy Pakistanis are among the award recipients, there are also some names who have corruption charges or whose institutions are lagging far behind on the path of development.
In this context, the INQUIRER team has also conducted some investigations and taken public opinion, which is being placed before the readers.
One of the respectful Citizen wrote a letter to His Excellency Mian Shahbaz Sharif, the Prime Minister of Pakistan, and His Excellency FM Syed Asim, and raised several valid questions about the departmental performance and corruption of RTO Peshawar Taq Qureshi.
In the letter, he wrote that the Regional Tax Office, or RTO Peshawar, is one of the mid-level field offices of the Inland Revenue Wing of FBR headed by a Chief Commissioner. RTO Peshawar’s jurisdiction covers the entire province of Khyber Pakhtunkhwa, including erstwhile FATA/PATA.
The current episode of massive corruption of around PKR 9 to 10 billion in bribes revolves around the issuance of a specific document called a CONSUMPTION CERTIFICATE to the sham & fraudulent Industries established in the erstwhile FATA/PATA by the RTO, Peshawar.
Before the 25th Constitutional Amendment of 2018, FATA/PATA areas were a Tax haven for Industries/Businesses located there, as they were exempt from paying any sort of Federal Taxes.
However, the 25th Amendment changed these tribal areas into “merged districts,” and hence all the federal tax laws were automatically extended to them. But after repeated protests, these tax exemptions have since been repeatedly extended in the budgets of 2023, 2024, and 2025 and might get extended again.
As per various SROs of FBR, these industries are allowed to import tax-exempt raw materials but solely for their in-house consumption (which apparently seems the sole purpose of their establishment). Their finished products are also required by law to be sold exclusively inside FATA/PATA or merged districts. If these industries or taxpayers are caught selling their goods outside in settled areas or non-merged districts, then normal taxes with huge penalties apply immediately.
Most of these FATA/PATA Industries (Predominantly Ghee & Oil Mills, Steel Melters, re-rollers, Billet Manufacturers, Corrugated Steel Pipe Makers, Tea Manufacturers & Silk Industries etc.) consider it their birthright to cheat FBR’s tax systems with the collusion of tax officials.
Firstly, they conveniently sell their tax-exempted imported raw materials (meant solely for consumption by their own FATA/PATA industries) directly to other industries of settled areas and as a result, pocket hefty amounts saved on account of exempted taxes.
Secondly, if some sub-standard finished goods are manufactured as an eyewash, even then instead of selling them inside merged districts, they sell them illegally all across Pakistan with obvious collusion of income tax/customs authorities, hence also putting the genuine competitors of other settled areas at a great disadvantage. Almost 95% of these industries are established on paper (with skeleton sheds/buildings), and they just sell their imported tax-exempt raw material in the open market.
Once the cycle of “import manufacturing – sales” is completed (mostly on papers) by these industries, then they are mandatorily required by specific SROS to obtain Consumption Certificates for each cycle(s) from RTO, Peshawar.
The Tax Office, through issuance of this critical document known as a Consumption Certificate, mainly confirms, verifies, and authenticates that a particular industry has actually consumed all its tax-exempt imported raw material and that the resultant finished products have also been sold inside erstwhile FATA/PATA areas.
However, all the tax officials in RTO Peshawar & FBR know that theoretically, issuance of such a certificate is next to impossible for these fraudulent industries established inside FATA/PATA areas, as genuine vital supporting documents like verifiable power/electricity bills, authenticated and verified list of whole-sellers/sales agents located inside merged districts with complete details of stock movement, mandatory payments through banks channels etc. are absolutely non-existent for such sham industries.
As a result, most of these industries produce fake documents for this purpose. Such fake documents can very easily be caught by even a novice tax official. More importantly, for the last few years, these industries have also been legally bound to submit surety bonds/post-dated cheques/demand drafts with tax authorities for each consignment of their imported tax-exempt raw material specifically to safeguard all the involved taxes for a subsequent determination by the RTO Peshawar whether such materials were genuinely consumed by these industries & then sold inside merged districts.
Obviously, if any fraud on this account is unearthed, then such sureties/post-dated cheques/demand drafts are required to be encashed to immediately to recover all involved taxes. However, this authority to encash such post- dated cheques/demand drafts/surety bonds is now being used as a blackmailing tool and money-minting source by RTO, Peshawar.
These surety bonds/post-dated cheques/demand drafts are mostly of huge amounts (the total is estimated to be around PKR 1150 Billion) and, if encashed by the tax department, can finish/destroy such sham industries. Since most of these are fake industries, there exists a 100% eventuality of apprehending their frauds by RTO Peshawar; hence, under the planned repeated threats by Taqi Qureshi of RTO Peshawar of encashing such surety bonds/post-dated cheques/demand drafts, such industries are forced/coerced into striking corruption deals for issuance of these Consumption Certificates after paying hefty bribes.
Once the bribe is paid, these Consumption Certificates are swiftly issued by the RTO Peshawar to the Customs, and the involved sureties/post-dated cheques/demand drafts are returned back and the case is closed.
Further, he wrote that proper issuance of a single genuine consumption certificate (after verifying and authenticating every single detail) may take several months. However, currently under the corrupt supervision of Mr. Taqi Qureshi (the incumbent Chief Commissioner on OPS) and Fauzia Iqbal (Concerned Commissioner), hundreds of Consumption Certificates have so far been issued within a short span of a few months.
Thus far, around 9 to 10 Billion Rupees have been paid as Bribes in such cases, which ironically might be more than the total taxes paid by FATA/PATA industries altogether. It is common knowledge that these consumption certificates are now being issued at the rates of 6 to 8 % (average 7%) of the total amount involved of the fake sales or sureties/post-dated cheques/demand drafts involved.
Please note that because of their extreme sensitivity & stringent legal checks such Consumption Certificates were not issued for the last multiple years but now they are being dished-out like freebies.
A few so-called tax consultants (such as Ijaz Ahmad & Hamaad Ismail who are now known to everyone in RTO Peshawar) have been specifically assigned, tasked & engaged directly by Mr. Taq Qureshi, Chief Commissioner, to carry out this task of finalizing bribe deals for issuance of such consumption certificates with the erstwhile FATA/PATA industrialists on his behalf.
The main employee/confidant from RTO, Peshawar earmarked for such deals is one Sales Tax Auditor, Mr. Haroon Khattak, who himself has earned so much money in this corruption episode that his coming seven generations will live like royals. A proper investigation into any of these people will expose this ongoing mind-boggling corruption scam.
Most importantly, such a quantum of corruption is impossible unless some higher-ups in FBR, the Finance Ministry, or even the Prime Minister’s Office are in collusion with Mr. Taqi Qureshi, as the recent conferment of Sitara-e- Imtiaz on this corrupt individual, Taqi Qureshi, is clear proof of such connections and the satisfaction of his superiors, who may have received their due share of corruption money.
We hope that this issue will be taken up very seriously and investigated thoroughly by a joint team of NAB/FIA/IB/MI/ISI to unearth this mega corruption scam. The current DG Intelligence & Investigation of Inland Revenue also seems to be a party to this issue because, despite this scam being common knowledge, he and his local team are very conveniently & criminally silent about it.
