A significant money laundering scheme amounting to Rs 9.7 billion has been uncovered within Pakistan’s iron and steel import sector, according to a classified document. Over the last three fiscal years, nine importers have been implicated in this large-scale financial fraud, which was revealed through an audit conducted by the Post Clearance Audit (PCA) South.
The PCA South’s sector-based audit, which targeted iron and steel imports, uncovered the scandal, revealing that the fraudulent importers exploited their “manufacturing status” to illegally evade Rs 315 million in duty taxes. These importers misused tax exemptions and reduced duty rates meant for genuine manufacturing enterprises, instead engaging in commercial sales without having any manufacturing facilities or business premises.
PCA South issued audit notices to the nine importers involved, but the notices were returned as the addresses provided were untraceable. Further verification confirmed that the companies were physically non-existent. A scrutiny of the Federal Board of Revenue (FBR) database revealed that these companies had transferred Rs 9.72 billion abroad while evading taxes through illegal exemptions.
The modus operandi of the importers pointed to a sophisticated scheme to funnel money out of the country. Alarmingly, three of the nine importers did not file income tax returns, declaring “Nil” financial worth while financing imports worth Rs 2.48 billion, further highlighting the scale of the money laundering operation.
PCA teams, under the leadership of Director General Chaudhry Zulfiqar Ali and Director PCA South Sheeraz Ahmed, are now intensively investigating the case to identify the true masterminds behind the fraudulent operations. The ongoing investigation aims to not only hold the real perpetrators accountable but also to delve into how these non-existent companies were able to obtain manufacturing status registrations without any physical presence, uncovering deeper layers of this intricate scam.
