Benami accounts: Zardari asked to explain hidden income used for duty, tax payment

KARACHI: Federal Board of Revenue (FBR) has issued notice to former President of Pakistan Asif Ali Zardari in a case where allegedly payment was made for import of bullet proof vehicles through a fake bank account.

According to document made available to The News International on Tuesday, the Regional Tax Office (RTO)-II Karachi issued the notices asking Asif Ali Zardari to appear personally for explanation till March 25, 2019.

The instant notice has been issued for alteration of assessment for tax year 2014 and for concealment of income under Section 111(1)(c) of Income Tax Ordinance, 2001.

The notice pointed out that during the probe conducted by Joint Investigation Team (JIT) into fake/benami accounts in compliant of order on September 05, 2018 of Supreme Court of Pakistan.

“It transpired that customs duties and other taxes of certain luxury vehicles were paid from suspicious sources, including fake/benami accounts, by you [Asif Ali Zardari],” the notices said.

It further added that these vehicles were either gifted by foreign states including UAE and Libya to the former president or imported shipped from Dubai in different names.

The RTO Karachi said that three pay orders were issued amounting Rs37.16 million to Collector Customs for clearance of such vehicles.

It further said that the apex court had directed to identify the beneficial owner of the amount appearing in the fake accounts.

The tax office said that the examination of income tax return revealed that the taxpayer had not declared the receipts of income / amount paid for the customs clearance and not even declared any receipts from such account.

The RTO said that the undeclared income falls under the concealed income and the payment of tax should be made as per law. The tax office calculates short payment of Rs13 million for tax year 2014.

The RTO Karachi asked the former president to appear up to March 25, 2019 otherwise the decision would be made ex-parte.

Besides the notice, the sources said that the RTO Karachi had investigated the fake account from where payment was made. The sources said that at present there was no amount in such bank account but statement showed transactions worth Rs5 billion had been made.

The sources said that the FBR would recover principal and additional 100 percent penalty. Besides, the charges would be framed under Anti-Money Launder law and Benami law in later stage.