ISLAMABAD: The Lifestyle Monitoring Cell of the Federal Board of Revenue (FBR) has detected tax evasion, involving a prominent film and television actress based in Lahore, who has a social media following of around 10 million. According to preliminary findings, she is suspected of spending approximately Rs 67.7 million from the allegedly undeclared funds on her lavish wedding early this year. The FBR’s “Lifestyle Monitoring Cell” has detected undeclared expenditure, a mismatch with her declared income and lifestyle, and massive concealment of income by this public figure. The Cell has strongly proposed a comprehensive audit of the said actress, issuance of notice for concealment of income, and a fresh assessment for the recovery of taxes from the actress. In view of her lifestyle, including her foreign travels, new business ventures, luxury purchases, etcs3, the FBR is likely to impose penalties and initiate prosecution against her. According to the details compiled by the FBR, the said actress is a prominent Pakistani actress and public figure who has established herself as a highly visible, versatile presence within the entertainment industry. She has made a name for herself in television and film. She has built a strong career by choosing standout roles in popular dramas. The popularity of the actress is evident from the fact that she has around 10 million followers on Instagram, over 30,000 subscribers on YouTube, and around two million followers on Twitter, and over 2.54 million followers on Facebook. She is also said to have travelled to Dubai to celebrate her birthday. The expenditure on her wedding exposed that open-source evidence from social media videos, reels, and posts documents the wedding’s lavish scale with expenditures on venues, catering, attire, jewelry, and production totaling around Rs 67.7 million. None of these outlays has been declared on her tax returns. The actress got herself registered with the FBR nine years ago, and her income tax declarations revealed that the taxpayer does not have the declared financial health to pay for a wedding that cost Rs 67.7 million and for her frequent international travels. The taxpayer failed to disclose the substantial expenditures on her wedding. These costs, which are personal outflows, were not reported in her wealth statements or expense summaries. This omission suggests that these expenses were likely paid from unreported income sources. The taxpayer’s financial health is insufficient for such activities when judged by her declared income. In other words, based on what the taxpayer reported to the FBR, she could not realistically afford the expenses incurred on her wedding, indicating a high probability of concealed earnings. The evidence strongly supports that huge amounts of concealed income were spent to finance her wedding. The funds came from income that was not declared to the tax authorities (i.e., as evasion through under-reporting of true income). The FBR has declared that the actress is suspected of tax evasion. By not reporting the income that funded her wedding and her travels, she likely evaded income tax on those amounts. The pattern observed (spanning multiple years and consistent, high-value expenses) suggests intentional and persistent avoidance of taxation, rather than an oversight, implicating her in possible concealment of taxable income and unexplained expenditure under the Income Tax Ordinance. 2001. In view of the findings, the FBR has recommended the following actions in accordance with the Income Tax Ordinance, 2001, and related regulations: (i) Conduct a Comprehensive Audit (Sections 114 and 177): Select the cases for a detailed audit of tax years 2020-2025 under Section 177. The audit should scrutinize the taxpayer’s income sources, bank statements, credit card records, and expenditure patterns in conjunction with her lifestyle. The objective is to uncover any undeclared revenue streams (e.g. payments received as a social media influencer, sponsorships, business income and to quantify the gap between reported income and actual expenditures. There are reasonable grounds to conduct an audit under section 177 of the Income Tax Ordinance 2001 to ascertain tax evasion. (ii) Issue Notice under Section 111 (Unexplained Income or Assets). Based on the findings of the audit, invoke section 111 of the Ordinance 2001 to formally call upon the taxpayer to explain the source of funds for her wedding and travels. If the taxpayercannot satisfactorily explain that these expenses were funded by taxed income or legitimate receipts, the amounts spent on these trips and her wedding should be treated as concealed income and added to her taxable income for the respective years. (iii) Amend Assessments and Recover Tax (Section 122): Based on the audit findings or even the prima facie evidence, the Regional Tax Office Islamabad should proceed under section 122 to amend the taxpayer’s assessment for tax years 2020-2025. This means adding the evaluated amount of unexplained expenditures to the taxpayer’s taxable income for each year in question. The tax due on these undeclared amounts should be computed and deemed for recovery. In essence, the full value of those expenses can be taxed as income if the source is not explained. (iv) Impose Penalties for Concealment (Section 182) and Consider Prosecution: In line with the law, apply appropriate penalties for the tax evaded under Section 182 of the Ordinance (read with Section 111 consequences). Given the willful nature of under-reporting, initiate prosecution under Section 192A for willful tax evasion, if deemed appropriate. Prosecution may be pursued especially if the taxpayer is uncooperative or if the evaded tax crosses statutory thresholds. Copyright Business Recorder, 2025