Educational institution’s record seized in tax evasion case

LAHORE: Directorate of Intelligence Inland Revenue (I&IR), Federal Board of Revenue (FBR) in a raid recovered, impounded and retained record of a known educational institution in an income tax evasion case.

The income tax evasion by the educational institution, which has around 100 branches of schools, colleges and different entrance test preparation centres in different cities, has been identified through an intelligence work.

The institution is run by four directors, who are real brothers, and one of them is a senior government officer in Audit and Accounts Group Civil Services of Pakistan. The FBR officials revealed that the directors were declaring accumulative income of around one million rupees only on yearly basis. On the other hand, the number of the campuses and fee structure of the institution deny the fact of their income statement deceleration.

The raid was conducted by the region B of I&IR, Lahore headed by an additional director along with a deputy director and other team members. The sources said the raids were conducted on three undeclared premises of the institution in the tax documents. They said the I&IR team after through intelligence and cross-checking of the Income Tax and Wealth Tax returns filed by them identified evasion in the taxes.

The raid was conducted on the basis of the tax returns filed for the tax year 2010 to 2015, both inclusive.It was identified that the institution owners filed their wealth tax return for the tax year 2014 declared their assets over Rs 450 million. Interestingly this around Rs 450 million worth of amount they declared as the foreign remittance they received from abroad.

They said it is surprising that a famous institution is earning nothing which it declared in income tax return filling and then suddenly in wealth statement declared huge assets and all this money they get in shape of foreign remittance.

This is not the first time that foreign remittance channel is being used for money whitening. The FBR had many time raises this issue with the quarters concerned about misuse of the foreign remittance channel for money whitening, said a former FBR chairman. He said such cases should be dealt under anti-money laundering to create deterrence of law. Otherwise, people will continue use this channel for money whitening while the government will keep struggling to increase the revenue generation, he asserted.