ISLAMABAD: The Federal Board of Revenue (FBR) has refused to entertain requests from four Chinese companies producing tiles in Pakistan to remove electronic cameras from their premises, arguing that this sector alone is allegedly involved in annual tax evasion of Rs30 billion.
The issue stirred a heated debate during the proceedings of the Senate Standing Committee on Finance and Revenue, which met under the chairmanship of Senator Saleem Mandviwalla at the Parliament House on Wednesday. FBR Chairman Rashid Mahmood Langrial stated that the FBR first installed electronic cameras in the sugar sector, which is considered politically sensitive because it is owned by major political parties. He revealed that tax evasion amounted to approximately Rs76 billion in the sugar sector, Rs102 billion in cement and Rs30 billion in tiles. He made it clear that the installation of cameras cannot be stopped. On the tile sector issue, representatives of the four Chinese companies, along with one Pakistani investor, appeared before the committee and contended that the FBR had installed 15 electronic cameras, thereby breaching the privacy of their production formulae. Chairman FBR Rashid Mahmood Langrial clarified that the matter had already been resolved by reducing the number of cameras to just four, solely for counting produced tiles. The Pakistani counterpart of the Chinese companies argued that the directors of Chinese firms remained uncomfortable with the cameras and wanted them removed entirely. The FBR chairman took a firm stance, stating categorically that if the directors were uneasy, they were free to cease operations, but the FBR would not remove the cameras.
He added that the FBR had selected 18 sectors and tiles was not among the highest priority. The FBR began with the sugar sector, where cameras revealed Rs76 billion in tax evasion. When the Chinese companies’ representative asked whether the FBR prioritised tax collection or camera installation, Chairman Langrial replied instantly that cameras would be installed to count produced tiles because of rampant evasion of sales tax. The senate panel examined a question raised by Senator Kamran Murtaza concerning reported financial irregularities of Rs375 trillion. It was clarified that the figure resulted from a typographical error in the consolidated executive summary, subsequently verified and corrected by the attorney general, who confirmed that no statutory report contained the error.
