Tax-evading doctors, beauticians added to FBR's crackdown list

Under mounting pressure from the International Monetary Fund to curb widespread tax evasion, Pakistan has launched an expanded crackdown targeting high-earning professionals, luxury service providers, and private companies, according to officials familiar with the matter.

The Federal Board of Revenue (FBR) has begun issuing audit notices to some of the country’s most prominent doctors and beauty-industry operators in Karachi, Lahore and Islamabad as part of a broader effort to widen the country’s chronically narrow tax base.

FBR officials said in the first phase, income audits will be conducted for 250 high-earning medical practitioners, including 100 doctors each in Karachi and Lahore, and 50 in Islamabad, the officials said.

Many of the practitioners reportedly charge premium fees but remain outside the formal tax net or underreport their income.

The crackdown also targets beauty parlors, aesthetics clinics, and retailers of high-end cosmetics. FBR officials believe these sectors generate significant untaxed revenue.

Officials said the agency has already compiled detailed information — including locations, branding, and business profiles — of dozens of such establishments operating in major cities.

“These businesses operate on cash and handle substantial daily transactions, but many do not declare their true income,” one senior FBR official said, speaking on condition of anonymity because they were not authorized to comment publicly.

The FBR also plans to bring cosmetics retailers and high-end beauty service providers into the tax net, officials said.

Beyond the services sector, investigators have uncovered indications of tax evasion in the paint manufacturing and distribution industry, prompting a separate probe that is expected to focus on several private companies.

To support the accelerated compliance drive, the FBR has already hired 600 private auditors and plans to recruit an additional 200 auditors in the coming days, with a long-term goal of deploying 2,000 private auditors nationwide, according to officials.

All contracted auditors will be legally required to maintain strict confidentiality regarding taxpayer information, officials said.

The aggressive push comes amid Islamabad’s ongoing negotiations with the IMF, which has repeatedly urged Pakistan to increase revenue collection, reduce exemptions, and bring untaxed sectors into the formal economy — conditions tied to future loan disbursements.