The Federal Board of Revenue (FBR) in Pakistan has uncovered a significant 'trade-based' money laundering and under-invoicing scandal, as reported by a private news agency. Following a comprehensive investigation by auditors, the FBR initiated a case against two companies in Peshawar, exposing a massive money laundering operation valued at Rs47 billion.
The FBR's report categorized this money transfer as 'trade-based money laundering.' According to the report, the two companies allegedly caused substantial financial losses to the national exchequer, estimated at Rs25 billion, primarily through under-invoicing practices related to the trade of solar panels.
In the First Information Report (FIR), the owners of the two companies, Moon Light Traders and Bright Star, were named as suspects. The FBR's findings indicated that Bright Star Company had engaged in under-invoicing in the Goods Declaration (GD) in 2013, while auditors scrutinized the records of 705 GDs for Moon Light Traders.
The investigation further revealed that these companies had been involved in money laundering activities from 2017 to 2022. The report on trade-based money laundering and under-invoicing was also forwarded to the Caretaker Prime Minister, Anwaarul Haq Kakar.
In a separate case in September, the FBR had exposed the country's largest tax fraud, totaling Rs314 billion, involving a fictitious company named K H & Sons. This fraudulent company, registered under the name Muhammad Kashif, only existed on paper and claimed to be in the iron and steel business, despite providing addresses at various markets. However, no case had been registered in connection with this tax fraud, raising concerns of potential suspects fleeing abroad if further delays occurred in filing a First Information Report (FIR).
