ISLAMABAD: The Federal Board of Revenue (FBR) has empowered Inland Revenue officers to arrest directors, CEOs, and CFOs involved in tax fraud.
This significant authority has been granted through the Finance Bill 2025-26.
It allows officers to make arrests during investigations if they have evidence-based reasons to believe tax fraud or related offences were committed.
Such arrests, however, require prior approval from the Commissioner.
Emergency Arrests Without Approval
In cases where delays could help an accused evade the law, officers may arrest without prior permission.
The officer must immediately report the arrest to the Commissioner.
This report must include key facts, details of the arrest, and the basis of the suspicion.
The Commissioner has the right to order the immediate release of the accused if the evidence is insufficient or if malintent is suspected.
Liability of Company Executives
When a company is suspected of fraud, every director, CEO, or CFO can be held personally responsible.
Even if the title differs, anyone believed to be responsible for fraudulent actions can be arrested.
These arrests do not relieve the company of any outstanding tax liabilities, penalties, or surcharges.
All arrests must follow the procedures outlined in the Code of Criminal Procedure, 1898, unless otherwise stated in the Act.
Officers must not be below the rank of Assistant Commissioner and must have material evidence to act against abettors of tax fraud.
