FBR Defends Buying 1,000+ Honda City Cars for Revenue Officers

The Federal Board of Revenue (FBR) has defended its procurement of 1,010 Honda City cars worth Rs. 6 billion for revenue officers. In an official communication to the Senate Standing Committee on Finance and Revenue, FBR said these cars were exclusively for grades 17 and 18 field officers. It said these cars will help in achieving tax collection targets during the country’s ongoing recovery. FBR clarified that these vehicles will not be allocated to “supervisory tiers of grades 19 and above” or headquarters staff. Instead, they will be operational vehicles, equipped with tracking systems and branded with FBR stickers so no one misuses them. It said the aim is to mobilize officers for fieldwork and enable physical verification of tax processes and on-site audits. The regulator said these vehicles will help cover the Rs. 600 billion tax gap from the previous fiscal year. Pertinently, an amount of Rs. 350 billion from this tally falls under the uncollected sales tax. FBR complained that Pakistan has only 42,000 registered manufacturers out of 260,000 and the majority are non-compliant. Also, 3 million citizens file income tax returns, while digitalization efforts are limited without physical enforcement and outreach. FBR highlighted that revenue collection sustainability depends on mobilizing staff to remote locations, such as sugar mills and other industrial sectors, where lack of access has hindered monitoring and enforcement. The new cars will help in this situation and also prevent revenue officers from asking factory owners to provide transportation. The regulatory said it had collected Rs. 250 billion in tax revenue from the sugar, cement, fertilizer, and tobacco industries due to enhanced monitoring and to build on this momentum, it argued that the new vehicles will make things even better. The procurement includes features such as a navigation system with a reverse camera, a high-grade interior, four-year extended warranties, and four free maintenance sessions, FBR added.