The Federal Board of Revenue (FBR) in Pakistan has identified a significant case of financial wrongdoing in the trade industry, making it one of the country’s largest financial scandals.
After a thorough investigation by auditors, the FBR took legal action against two companies located in Peshawar. They found that these companies were involved in a massive money laundering operation valued at Rs47 billion, officially termed as ‘trade-based money laundering.’
According to the report, these companies caused a substantial financial loss to the national treasury, estimated at Rs25 billion, through a practice known as ‘under-invoicing.’ This misleading strategy was used under the disguise of dealing with solar panels.
The owners of these companies, Moon Light Traders and Bright Star, have been named as suspects in a First Information Report (FIR). The investigation revealed that Bright Star had been engaged in under-invoicing since 2013. Auditors closely examined records related to 705 Goods Declarations (GDs) associated with Moon Light Traders. Additionally, it was discovered that these companies continued their money laundering activities from 2017 to 2022.
In a separate incident in September, the FBR uncovered a massive tax fraud amounting to Rs314 billion. This fraud was committed by a fictitious company known as K H & Sons and was exposed by the Director-General of Internal Audit at Inland Revenue’s team.
Read More: Huge Rs314 Billion Tax Scam Revealed by FBR