Pakistan loses Rs1.6 trillion a year to tax evasion as FBR logs 675 raids in eight months
Pakistan loses an estimated Rs1.6 trillion a year to tax evasion, under-reporting and illicit manufacturing across 18 sectors, and the Federal Board of Revenue is answering with raids: 675 enforcement operations were recorded in its Inland Revenue Enforcement Network data between January and August 2026, according to a Token Times review of publicly available reports.
The tobacco trade is the single largest hole. The FBR estimates Rs300 billion in annual revenue losses from the sector, where the cigarette market exceeds 80 billion sticks a year and more than half is linked to illegal trade. Illicit cigarette consumption alone is put at 43.5 billion sticks annually.
Enforcement operations during FY2025-26 also produced significant seizures of illicit goods and raw materials, the review found. The FBR has now set a target of generating Rs778 billion through enforcement measures in FY2026-27, a goal that will depend on consistent action against evasion and stronger follow-up investigations rather than raids and seizures alone.
Macroeconomic analyst Osama Siddiqui said effective prosecution, asset recovery and sustained pressure on supply chains were essential to stop illegal operators resuming activity after raids. The scale of the losses matters beyond the revenue line: it narrows the tax base the government is trying to broaden while public finances remain under pressure.
