Author: Mrs. Anjum Shahnawaz

ISLAMABAD: The Directorate General of Internal Audit (Customs) Lahore has challenged the issuance of SRO 1114(I)/2019 before the Policy Board of the Federal Board of Revenue (FBR) alleging the issuance of the notification was a bid to save senior customs officers in mega gold corruption cases.

In a compliant on October 02, 2019 made to Dr. Abdul Hafeez Shaikh, Advisor to Prime Minister on Finance and Revenue and Chairman FBR’s Policy Board and the other members of the FBR’s policy board that is constituted under Section 6 of the FBR Act, 2007, it has been alleged that the SRO has taken away from the Customs Internal Audit its capacity to detect customs officers’ corruption and resulting massive revenue loss.

The SRO has been called a device to liberate the customs officers’ corruption and revenue losses from the fear of subsequent internal audit’s detection.

According to the complainant i.e. Directorate General of Internal Audit (Customs) Lahore, the FBR has purported to act under certain provisions of Customs Act and Sales Tax Act which do not give the FBR any power to abolish any field formations.

It is alleged that these provisions confer on FBR only the power to appoint officers in field formations and to define their powers and functions.

It has been further alleged that two directorates of Internal Audit had been abolished in breach of FBR’s statutory obligations under FBR Act, 2007.

According to the complainant, Section 4(1)(d) of FBR Act requires FBR to improve productivity in its field formations. Section 4(1)(g) of FBR Act requires FBR to take appropriate measures including internal controls to combat corruption within its field formations.

Section 4(1)(j) of FBR Act requires FBR to introduce and maintain a system of accountability of performance, competence and conduct of its employees.

It has been alleged that abolition of two directorates of internal audit and over burdening of the single directorate of Islamabad with the responsibility of Customs Internal Audit throughout the country is a measure against FBR’s statutory obligation to improve productivity in field formations.

It is also a measure against the FBR’s statutory obligation to control corruption and to maintain a system of performance accountability of its officers and employees.

The complainant questioned that why FBR has conceived a unique SRO of its own kind which has the effect of sheltering corruption and revenue losses from the fear of detection.

It has been alleged in the complaint that the Directorate of Internal Audit Karachi has been abolished to shelter the customs officers posted in Karachi, who are normally responsible for 90 percent of the customs corruption and revenue losses which take place throughout the country in a year.

It has been further alleged that the Directorate of Internal Audit Lahore has been abolished for more than one reason, all meant to shelter revenue losses from detection and to save corrupt customs officers from accountability.

It has been alleged in the complaint that the struggle of Directorate of Internal Audit Lahore to recover a revenue loss of Rs60 billion in gold cases and the efforts of the Directorate to take gold cases against customs officers to a logical conclusion have resulted in its abolition just to serve the interests of senior customs officers involved in these cases.

The gold case made by Internal Audit took a new beginning when in response to a new story published on June 11, 2018, the Federal Tax Ombudsman took suo moto cognizance of these cases involving a revenue loss of Rs60 billion and recommended disciplinary and criminal proceedings against the customs officers responsible for causing the revenue loss.

The collector of five customs collectorates subsequently filed representations against FTO’s recommendations before the President of Pakistan. However, the Directorate of Internal Audit Lahore had pleaded the gold cases against the customs officers.

The directorate of internal audit Lahore requested the FBR Policy Board that the operation of SRO may be immediately held in abeyance till determination of its legality and proper evaluation of its pro corruption consequences.