Capital hotels, restaurants found big tax evaders

ISLAMABAD: The Federal Board of Revenue (FBR) has allegedly found massive tax evasion worth millions of rupees by restaurants and hotels in federal capital, The News has learnt.

On other hand, the restaurant owners under banner of Islamabad Restaurant Association had warned to close down their restaurants from April 23, 2019 (tomorrow) because of the continued harassment by the FBR.

Official documents and top officials of FBR stated that they placed Restaurants Information Management System (RIMS) at almost all reputed restaurants in the federal capital that is linked with the system of tax machinery. Now the restaurants are charging 17 percent General Sales Tax (GST) on services but the system was deliberately kept discontinued for hours in order to keep tax machinery in the dark. Now the customers are paying GST on services in the jurisdiction of the federal capital but it is not being deposited in the national kitty.

According to data shared by the FBR about one top restaurant located in Islamabad where one cannot find seats because of its beautiful location, it used to earn millions of rupees but it declared less than Rs5 million for a month. The FBR’s top management held meetings with their associations and FPCCI during last two months and violations of RIMS were shown to them and given them warning period. However, no improvement was shown. The FBR high-ups said that some restaurants including some reputed ones were showing no sale for last several days and majority kept their system offline the whole day and used to upload a few invoices around 12 midnight.

Another top official said that the FBR asked them to come for holding meeting with one top officials here on Monday (today) and their genuine concerns would be addressed. But the FBR cannot allow hiding of taxes worth millions of rupees.

“Now we are considering introducing gift scheme for customers on the basis of receipts they obtained from restaurants after taking foods in order to promote documentation drive,” said the official and added that if the restaurants charged from customers, there was no justification for not depositing the taxes in national kitty.

The GST on services is the domain of the provinces and first of all Punjab Revenue Authority (PRA) introduced gift scheme for customers on the basis of receipt they obtained from restaurants. It is Turkish model to incentivise customers for documentation of the economy. Now this scheme needs to be implemented by FBR for incentivising customers in Islamabad.

Meanwhile, the strike call was taken back by Islamabad Restaurant Association after successful talks with Adviser to PM on Revenues Hammad Azhar. The Islamabad Restaurant Association and FPCCI representatives will hold meeting with FBR officials today (Monday).