KARACHI: The Federal Board of Revenue’s (FBR) Directorate of Law and Prosecution (L&P), established in 2019 to combat tax evasion and streamline litigation processes, remains in a state of paralysis. After half a decade, the department is still devoid of the essential operational resources and infrastructure, resulting in a colossal Rs2700 billion ensnared in legal disputes.

The L&P’s inception was a strategic move to address the rampant tax evasion and litigation that has long undermined the FBR’s efforts. Yet, the department has encountered persistent internal resistance, particularly from the upper echelons of Customs management. Top Customs officials appear reluctant to empower the L&P, fearing accountability and potential repercussions.

This reluctance to activate and empower the L&P not only signals a fear of accountability but also poses a significant barrier to justice.

Prime Minister Shahbaz Sharif has repeatedly emphasized the gravity of the situation, pointing out the staggering sum locked in legal battles across various courts due to unresolved tax evasion cases. Despite these alarming figures, the Customs top brass has shown a disconcerting level of inactivity, neglecting the dire need to equip the L&P with the necessary tools to function effectively.

It may be mentioned here, the Attorney General’s office sent a letter to the FBR chairman highlighting the poor performance of FBR’s legal teams in courts, which has led to heavy revenue losses for the national exchequer.

Attorney General criticized the FBR’s legal teams for their delay in filing review applications against decisions made by appellate tribunals and for not showing urgency in obtaining stay orders, which has resulted in prolonged legal proceedings and financial losses.

The FBR’s legal representatives have also been noted to annoy the benches by failing to appear in court despite being served notices, causing further delays.

The consequences of this inertia are far-reaching, allowing offenders and tax evaders to evade the law with impunity. The L&P, envisioned as a cornerstone in the fight against tax evasion, is effectively incapacitated, leaving the FBR’s legal framework in jeopardy.

This ongoing crisis underscores an urgent need for reform within the FBR’s legal system. It calls for immediate measures to operationalize the L&P, bolster oversight, and safeguard the integrity of Pakistan’s tax litigation process. With billions at stake and the FBR’s credibility on the line, the time for decisive action is now.