ISLAMABAD: Amid mounting pressure from the business community over sweeping powers granted to tax officials under Sections 37A and 37B of the Sales Tax Act, the Federal Board of Revenue (FBR) has introduced a procedural framework to regulate arrests in tax fraud cases, providing safeguards to prevent misuse.

The move follows a nationwide strike by traders on July 19 and unsuccessful talks with SAPM Haroon Akhtar. The protest stemmed from concerns over arbitrary arrests and harassment by tax officers. In response, top business leaders met with Field Marshal Asim Munir, who assured them that no undue hurdles would be placed in the way of lawful business activity.

Sales Tax Circular No. 02 outlines a structured FBR process governing inquiries, investigations, and arrests in tax fraud cases. The framework introduces multiple layers of approval and clearly defines prosecutable offences to minimise discretionary action.

According to the circular, an Inland Revenue Officer may initiate an inquiry only after obtaining written approval from the Commissioner. This approval must be grounded in concrete evidence pointing to the commission of tax fraud or another prosecutable offence.

After a traders backlash arrests now subject to........

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