‘Borrowing money by FBR for meeting tax revenue target wrong’

ISLAMABAD: The department of the Auditor General of Pakistan has termed the practice Federal Bureau of Revenue (FBR) to borrow money from multinational companies for meeting tax revenue target wrong. PAC’s sub-committee gave the FBR six months to make recoveries in various cases.

A meeting of the sub-committee of PAC chaired by Senator Sherry Rehman was held Wednesday in which the audit objections related to FBR from the year 2010-11 to 2017-18 and the refund case of Rs16.9 billion of five companies were examined.

While examining a particular case of refund of Rs16.9 billion to five companies (MCB Bank Ltd, M/s Government Holding (Pvt) Ltd, M/s Pakistan Telecommunication Authority and OGDCL) in 2011, the audit official said FBR paid refund in three cases although there was no refund claim. The audit officials further revealed that the FBR used to borrow money at the end of June to show as meeting the tax collection target. The FBR officials admitted to the committee that in the past, the FBR used to borrow from the multinational companies to meet its revenue targets, but two years ago, the FBR abandoned this practice. “These decisions were made at the level of finance ministry and the prime minister,” the FBR officials told the committee. Sherry Rehman said this exercise of FBR is causing problems to the provinces under NFC. The issue of recoveries was also discussed during the meeting and PAC convener Sherry Rehman directed the FBR officials to recover the amount within six months. Committee member Syed Naveed Qamar said why FBR does not have any specific time-frame for recovery. “The FBR should make a law in which specific time for recovery should be given,” he added.

Talking to media after the committee meeting, Sherry Rehman said we have cases before us for 10 years; there is no time limit for recovery on them. “I have given them six months for 10 years recovery but they were saying give us more time but if the performance is better then recover,” she said, adding that if the country does not run on its own taxes then you will take more and more loans.