Pakistan: Solar Import Tax Evasion Concerns Raised by FBR

Massive ⁣Under-Invoicing and Alleged Money Laundering Plague Sindh Solar Energy⁤ Project

Islamabad – A parliamentary committee has uncovered⁣ notable irregularities in the import of⁣ solar ⁣home‌ systems⁣ under the Sindh Solar Energy Project (SSEP), pointing to widespread under-invoicing, potential tax evasion, and suspected trade-based ⁢money laundering. The ⁢revelations,​ presented‌ by the Federal Board of Revenue (FBR) to the Senate standing Committee on Economic Affairs, have⁢ triggered investigations ⁣and raised concerns about⁢ accountability.

The core of the⁤ issue centers around a ⁤significant discrepancy​ between the declared value of imported solar kits ⁤and the actual payments made. Contractors reportedly declared the value of these kits between⁤ $16 and $23.4 per unit for tax⁤ purposes.​ Though, the World Bank, which funded the SSEP, made payments of up to $112.44 ⁢per⁣ unit – a staggering 700% higher. ⁣This difference amounts ‍to $89 to $96 per unit, suggesting a deliberate effort to minimize tax liabilities and possibly funnel funds illicitly.

Investigations are currently underway, focusing on allegations of trade-based ​money laundering, tax evasion, fund layering, and violations of​ foreign exchange regulations. The FBR report specifically highlighted the activities⁢ of ⁣M/s Beyond​ Green, a ⁢Karachi-based importer, which brought in 200,968 solar home system units between December 2024 and July 2025. These imports were cleared under HS Codes 8501.7210 and 8501.711, benefiting⁣ from zero customs duty and income tax, alongside reduced sales tax rates. Notably, four of the consignments were ⁢processed through the‍ Green Channel, indicating a streamlined clearance process.

Subsequent verification revealed that ​the goods‍ declarations (GDs) submitted to the Sindh government‌ were either falsified or tampered with. Evidence suggests the same kits were then supplied to the ⁢Sindh government ‌at significantly inflated⁤ prices. Contracts with ‍shenzhen LEMI‍ Technology Development Co Ltd ⁢of China confirm a contractual price of approximately $112.44 per‌ kit, a figure directly paid by the world Bank.

The FBR has identified $12.5 million in potentially fraudulent invoices and uncovered evidence of‍ third-party ‍remittances routed through entities based in the United Arab Emirates,​ further fueling suspicions‍ of money laundering and foreign exchange violations. The case has been⁤ referred for prosecution⁣ under⁣ the Anti-Money Laundering‌ Act⁤ of 2010, and a extensive sales tax audit has been recommended.

adding⁣ to​ the complexity,​ approximately 30,000 solar kits out​ of the initial 200,000 imported could not be distributed within ⁣the SSEP’s original timeframe and are⁤ now‍ subject to ⁤a separate arrangement. Both⁣ the Sindh cabinet and the National Accountability Bureau (NAB) have ‌initiated investigations, ​with a forensic audit​ already ‍underway.

The Senate committee expressed strong dissatisfaction with​ the lack of accountability, questioning ‍the absence of suspensions of suspected officials. ​Chairman ‍Saifullah Abro directed a letter be sent⁣ to the‌ Chief Minister of Sindh to ensure those involved are held responsible.

Furthermore, the committee sharply criticized‍ the repeated absence of Minister for⁣ Economic ‍Affairs‌ Ahad Khan Cheema ‍and senior provincial ⁤bureaucrats from ⁢committee meetings. Concerns were raised ‌about a potential disregard for parliamentary oversight,‌ with warnings issued regarding the potential cancellation ‍of committee membership for repeated unexcused absences. ⁢The committee also postponed agenda items related to Khyber Pakhtunkhwa projects due to the presence of‍ junior provincial officials, demanding the ⁣attendance of provincial secretaries at future meetings.

Keywords: Sindh Solar Energy Project, SSEP, Trade-Based Money Laundering, Tax Evasion, Under-Invoicing, World Bank, ​FBR, Pakistan, Corruption, Financial Crime, Solar Kits, Anti-Money Laundering Act.