Karachi, October 7, 2024 – In a shocking revelation, the Federal Tax Ombudsman (FTO) has identified a monumental tax fraud worth Rs 14.66 billion attributed to a cybercrime breach within the Federal Board of Revenue (FBR). The crime, which infiltrated FBR’s system, resulted in unauthorized access and the misuse of taxpayer data, leading to colossal losses for the national exchequer. This fraud case marks one of the most significant cyberattacks targeting Pakistan’s tax infrastructure. The FTO’s findings, based on a detailed investigation, point to serious lapses in securing the complainant’s user ID, password, and sensitive taxpayer data. These vulnerabilities facilitated the cybercriminals to commit tax fraud on behalf of the complainant, raising questions about the overall integrity of the FBR’s system. The FTO labeled this breach as a case of maladministration, highlighting the glaring gaps in FBR’s ability to protect its system from such sophisticated attacks. The Case in Detail The case revolves around an individual, a retired Armed Forces personnel, who registered for sales tax under the business name ‘Gravity Traders’ in 2010. The complaint filed against the Commissioner RTO-II, Karachi, accuses the tax authority of fraudulently attributing Rs 81.43 billion in transactions to the complainant for the tax periods between September 2023 and January 2024. These transactions led to a corresponding sales tax liability of Rs 14.66 billion. The complainant was blocking by the tax authority on March 27, 2024, for allegedly declaring fake supplies, despite having filed ‘null’ sales tax returns for the same period. The FTO’s investigation revealed that the complainant was neither served a proper show cause notice nor given an opportunity to defend himself before his Sales Tax Registration (STRN) was blocked. Upon reviewing the complaint, the FTO referred the matter to the Revenue Division Secretary for comments, as outlined in Section 10(4) of the FTO Ordinance and Section 9(1) of the Federal Ombudsmen Institutional Reforms Act, 2013. The tax authority’s defense, submitted through an Excel sheet, revealed large-scale fake supplies declared…