close
Advertisement
Can't connect right now! retry

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!
December 10, 2019

FBR unearths Rs18 billion of tax evasion

Business

December 10, 2019

KARACHI: The Federal Board of Revenue (FBR) has unearthed sales tax evasion of around Rs18 billion by a corporate taxpayer for the last five years, it emerged on Monday.

The Large Taxpayers Unit (LTU) Karachi discovered the evasion by the taxpayer, who was engaged in dodging the tax authorities in its declaration of sales and purchases. The LTU Karachi, the major revenue collecting arm of the FBR, has jurisdictions over big volumes companies.

Sources in LTU Karachi said the tax evasion was discovered after detailed scrutiny of monthly sales tax returns filed by the taxpayer between 2015 and 2019. However, they didn’t mention the company’s name.

LTU said the discovery was made when the taxpayer’s sales tax returns were scrutinised ‘in depth’ and that revealed huge anomalies in declared sales. “The taxpayer has been served with the statutory notice under the relevant provisions of Sales Tax Act 1990 and collection of evaded sales tax is expected,” the unit said in a statement.

In another case, the LTU Karachi detected tax evasion by a taxpayer, who claimed illegal brought forward losses to the tune of Rs21 billion. The revelation was made when the taxpayer’s past assessment record was deeply probed whereby it transpired that the taxpayer claimed losses to the tune of Rs21 billion as against actual assessed losses of Rs10 billion.

The LTU Karachi sources said the taxpayer was indulged in brought forward losses for the past six years. While this was allowed under the law, the scrutiny revealed that the taxpayer exaggerated the losses and was trying to dodge the tax authorities to reduce his income tax liabilities.

The sources said the unit would assess the income tax return to be filed for the tax year 2019 and would make addition to the income to recover assessable tax. The sources said the quantum of income tax evaded by the taxpayer could not be ascertained at this time.

LTU believes that disclosure of the taxpayer would result into huge tax payments for the current and future tax years. Tax collectors planned to hire private auditors to scrutinise books of companies to catch tax cheats as they spotted a number of discrepancies in various production and supply cycles.

The FBR faced revenue shortfall of Rs163.5 billion in the first four months (July-Oct) period of the current fiscal year as the provisional revenue collection stood at Rs1.3 trillion as against the desired target of Rs1.4 trillion. FBR collected Rs320 billion in October and maintained overall increase of 16 percent over last year.

The domestic taxes went up 25 percent. This was due to taking into account negative aspect of import compression of Rs50 billion.

However, the government has been left with no other option but to revise downward the annual tax collection target from Rs5.5 trillion mainly because of import compression as it decreased $400 million in October.

Topstory minus plus

Opinion minus plus

Newspost minus plus

Editorial minus plus

National minus plus

World minus plus

Sports minus plus

Business minus plus

Karachi minus plus

Lahore minus plus

Islamabad minus plus

Peshawar minus plus