Audit paras for FY2019-20: PAC asks FBR to collect super tax from affluent

ISLAMABAD: The Public Accounts Committee (PAC) Friday directed the Federal Bureau of Revenue (FBR) to collect super tax from those taxpayers with earning over millions of rupees and recover the sales tax from unregistered importers.

The PAC also directed the FBR to hold the departmental accounts committee meetings on the audit objections.

The PAC meeting was held with committee chairman Rana Tanveer Hussain in the chair, in which the audit paras related to FBR for the year 2019-20 were examined.

The PAC was informed that the FBR had introduced super tax, but did not collect Rs16 billion under the head from 123 taxpayers as though it had made some recovery while some cases were pending in the court.

The FBR chairman told the committee that the recovery of super tax would be made in the next two months.

The committee ordered for completing the matter within the stipulated time period.

PAC Chairman Rana Tanveer ordered for settling the audit paras of less amounts to be settle at the level of departmental accounts committee.

The Audit officials told the committee there were 131 audit paras of the FBR for this year, which were recommended for settlement.

PAC Member Sardar Ayaz Sadiq said that his sub-committee had audit paras of the FBR from 1985 to 2010, which envisaged recovery of Rs1.8 trillion, and even the tribunals were not completed for the last two-and-a-half years.

While discussing the pending cases of the FBR in courts of law, the PAC chairman said cases related to revenue could not be stayed for more than six months.

Sardar Ayaz Sadiq asked if the parliament could enact any legislation that would resolve revenue cases in time.

The FBR chairman said the issue was not going to be solved by legislation, the real issue was capacity, which the courts and the FBR lacked.

He said even the FBR tribunals were also not complete and lot of cases stuck up due to incomplete tribunals. The PAC decided to issue a directive to the law secretary on the matter of completing the FBR tribunals.

During the meeting, the audit officials told the committee that there were 131 audit paras of the FBR while the decisions of the Departmental Accounting Committee (DAC) were not being implemented.

The PAC chairman directed the FBR to take up the audit objections and present the implementation reports of the DACs to the committee.

Ayaz Sadiq said some of the FBR audit paras were pending for the last 25 years and the FBR chairman was not supposed to do all that work.

Rana Tanveer remarked that the audit paras of less than Rs10 million should be settled at the DAC level and if it happens, the load of work on the PAC will be reduced.

He said that Ayaz Sadiq headed the most important PAC sub-committee but the work was done as per expectations.

Ayaz Sadiq said that he did not want to give any explanation, but his work would speak for itself.

The PAC chairman told Ayaz Sadiq, “When you were the speaker, you did not give me a chance to speak; your eyes were fixed at only Chaudhry Nisar.”

Examining the audit para relating to sales tax of ghee manufacturers, the audit officials told the committee that 21 ghee manufacturers made a supply of over Rs68 billion to unregistered buyers and the recovery of sales tax should be made from all the unregistered buyers.

The audit officials told the committee that the sales tax of over Rs11.58 billion was to be collected from those unregistered buyers (distributors, wholesalers, retailers) who purchase the ghee and cooking oil from ghee manufacturers.

The FBR officials told the committee that unregistered agencies have had made purchases of ghee and efforts were being made to identify the wholesalers.

The committee deferred the matter and directed the FBR to recover the amount.

Examining another audit para, Audit officials told the committee that officials of the Pakistan Customs did not collect duties on the import of vehicle spare-parts, which caused a loss of more than Rs1 billion to the national exchequer.

The FBR chairman said recovery was under way in those cases and the committee had ordered for recovery in 65 days.

The Audit officials said the taxpayers of 42 steel mills inflicted a loss of Rs770 million on electricity bills without paying the sales tax.

The FBR chairman told the committee that steel sector did not pay taxes and steps had been taken for the purpose but some certificates had been issued but cheques have not been deposited in the banks concerned, which had been pointed out.

He said an inquiry committee had been formed in that regard and the officers involved had been sacked. The committee directed for recovery.

Examining the another audit para, the audit officials told the committee two steel mills did not pay sales tax. The FBR chairman told the committee that the matter was pending in the court.

The PAC deferred the matter as the matter was in court.