ByThe Large Taxpayers Office (LTO) Karachi has launched the Inland Revenue Enforcement Network (IREN) to strengthen efforts against tax evasion within its jurisdiction. This initiative, announced on January 12, 2025, follows directives from the Federal Board of Revenue (FBR) and aims to streamline enforcement measures, ensuring compliance with tax laws like the Sales Tax Act, 1990, and the Federal Excise Act, 2005.
Scope of Operations for IREN
Under the FBR’s framework issued on September 19, 2019, the roles and responsibilities of the IREN squad and the enforcement units within the field offices are clearly delineated.
Responsibilities of Concerned Field Offices
Field offices, such as Regional Tax Offices (RTOs) and LTOs, retain jurisdiction over enforcement actions, including:
- Conducting tax-related enforcement activities in accordance with the law.
- Following up with post-enforcement proceedings, including legal actions.
Key Roles of the IREN Unit
The IREN squad is tasked with a focused approach to tackling tax evasion, including:
- Taxpayer Education: Educating traders and taxpayers about the legal and penal consequences of tax evasion and illicit trade.
- Raids and Seizures: Conducting operations to seize goods involved in tax evasion, including searches of storage facilities.
- Mobile Inspections: Deploying squads to inspect vehicles suspected of transporting tax-evaded goods.
- Distributor Monitoring: Keeping a close watch on major distributors of goods like locally produced cigarettes, particularly from regions such as Khyber Pakhtunkhwa (KPK) and Azad Jammu and Kashmir (AJK).
- Regional Coordination: Collaborating with regional enforcement hubs for streamlined actions.
- Post-Enforcement Action: Pursuing criminal prosecutions for individuals involved in illicit activities.
Enhancing Transparency and Accountability
To ensure fair practices, the LTO Karachi has proposed that confiscated goods suspected of bearing counterfeit tax stamps undergo a joint re-verification process. This involves collaboration between the IREN squad and the relevant field formations, emphasizing transparency and accountability in enforcement activities.
Targeted Focus on Illicit Trade
The IREN squad’s operations are particularly significant for sectors like tobacco, where tax evasion through counterfeit tax stamps and smuggling has led to considerable economic losses. By monitoring major distributors and manufacturers, particularly in regions known for illicit trade, the IREN aims to curb revenue leakages effectively.
A Commitment to Tax Compliance
The establishment of the IREN squad highlights the LTO Karachi’s dedication to combating tax evasion and promoting compliance with tax laws. By combining education, enforcement, and transparency, this initiative aligns with national objectives to reduce the tax gap and improve revenue collection.
This effort is expected to strengthen Pakistan’s tax administration while deterring illegal activities that undermine the country’s fiscal stability.
