FBR empowers raiding unit to check untaxed trade

KARACHI: The Federal Board of Revenue (FBR) has extended the scope of its vigilante squad – originally dedicated to crack down illicit cigarettes – to check other tax evading goods, sources said on Tuesday.

The sources said the FBR expanded the scope of enforcement unit against illicit supply of goods, including cement, sugar, beverages, fertilisers and tobacco.

“The FBR sets up Inland Revenue Enforcement Network (IREN) to control illicit trade of beverages, sugar, fertiliser, cement and tobacco,” a senior official at Regional Tax Office (RTO-II) confirmed with The News. The official said previously the unit was only monitoring illegal trade of cigarettes.

The official said the IR office has been empowered to conduct raid on factory premises against illicit supplies under the new enforcement instructions. There is a huge revenue gap due to illicit trade of goods, the official added.

The FBR issued comprehensive instructions to field offices of Inland Revenue to effectively monitor the supply of the goods.

According to the operational parameters of IREN, the IR offices would consult IREN related to conducted raids, interception or sealing of any premise/place or vehicle. The FBR issued instructions to all RTOs/large taxpayers units (LTUs)/directorate of intelligence and investigation that field enforcement units should be headed by an officer of grade 18 with 4-5 officials of BS-16. The enforcement units have been also empowered to inspect vehicles in which unpaid tax goods are being supplied.

The units have been asked to conduct monitoring of major distributors of goods, including local brand of cigarettes originating from Khyber Pakhtunkhwa and Jammu and Kashmir-based manufacturers. The FBR allowed the enforcement units to initiate post-enforcement proceedings including criminal prosecution against individuals involved in nefarious activity. The enforcement units have been directed for identification of core stakeholders in specified goods / sectors.

Tax units have been directed to conduct discreet market survey to ascertain the market share of local brands/manufacturers and smuggled/counterfeit of goods in specified items. The FBR further advised the tax offices to conduct comparison of manufacturing of goods with their actual market share.

The RTO official said IREN represented IR’s collective response to the menacing challenge of tax evasion and illicit trade of goods in Pakistan. The official said the FBR constituted regional enforcement hubs to be maintained by the IREN.

The regional enforcement hubs have been established in Khyber Pakhtunkhwa, Rawalpindi/Islamabad, Lahore, Faisalabad, Multan, Sindh/ Balochistan and Karachi. In Karachi, LTU and LTU-II and RTO-II and RTO-III would have jurisdiction to conduct raids and inspection against illicit trade of goods.