Punjab Govt Finds Evidence of Massive Tax Evasion by Sugar Mills

The government of Punjab has found “conclusive evidence” against the sugar mills selling huge quantities of sugar “off the book” in an attempt to evade taxes.

The Provincial Cane Commissioner, Zaman Wattoo, informed the Punjab Industries Department in a letter that “There is strong circumstantial evidence of huge quantities of sugar being sold off-the-book. The following facts point to this illegal practice. If off-the-book purchases from the middlemen and the purchase centers are accounted for, figures of off-the-book sale of sugar go much higher”.

“They [the millers] have established their purchase centers in the field where sugarcane is purchased from the farmers. Almost all the sugar mills were found not issuing cane purchase receipts (CPRs) at these centers,” he revealed.


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The officials associated with the Cane Department revealed this after the Inquiry Commission on Sugar found around 40,000 unregistered buyers involved in transactions worth billions of rupees.

They also traced around 3,000 brokers and middlemen in charge of the monopoly over the local sugar market and who had aided the millers in gaining extra profits. The officials claimed that the suspects had been selling sugar off the books for the last five years.

Commissioner Wattoo further stated, “There is strong evidence that the sugar mills are under-reporting the rate of the sugar recovery. The labs of the Sugarcane Research Institute (SRI) and the Cane Commissioner’s office have been checking the recovery rate. The average recovery rate to date comes to 10.70 percent against 09.00 percent as reported by the sugar mills on 13-01-2021”.


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The Commissioner’s letter also revealed that millers had reported the production of 1.714 million metric tons of sugar while the total production of sugar as per the average recovery rate of the government laboratories should have been 2.069 million metric tons.

It further read:

“Sugar mills have not provided any record of sugarcane purchased at these purchase centers despite repeated requests by the Cane Commissioner’s office, action for which will be taken in due course of time. Same is the case with sugarcane purchased from the middlemen”.

In response, the Pakistan Sugar Mills Association has denied the provincial government’s claim and has asked the government to control the surge in sugar prices by taking action against the middlemen.

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