Karachi, January 2, 2024 – The Federal Board of Revenue (FBR) has successfully recovered an outstanding tax amount of Rs 4.5 billion from a multinational company (MNC).
This achievement comes on the heels of a diligent investigation carried out by the Large Taxpayers Office (LTO) in Karachi, the primary tax collection arm of the FBR.
According to reliable sources within the LTO Karachi, the tax recovery was initiated following the discovery of a tax credit availed by the MNC related to a discontinued business. The action taken by the tax office was in accordance with the violation of Section 65E of the Income Tax Ordinance, 2001. This section allows companies a tax credit for a period of five years for business expansion based on the investment of new equity.
However, the same section outlines the circumstances under which such credits can be deemed wrongly allowed. If, within five years of the credit being granted, it is discovered that the business has been discontinued or any of the specified conditions have not been fulfilled, the Commissioner Inland Revenue has the authority to re-compute the tax payable by the taxpayer for the relevant year.
FBR sources reveal that the successful recovery was made possible through the tireless efforts of Additional Commissioner Kashif Hafeez from the LTO Karachi. Hafeez’s intelligent and meticulous approach to the case played a pivotal role in identifying the erroneous tax credit and subsequently recovering the substantial amount.
The sources further highlight that upon the discovery of the improperly allowed tax credit, the LTO Karachi promptly notified the multinational company, urging them to repay the outstanding amount. The MNC, in compliance with the tax regulations, promptly repaid the Rs 4.5 billion, showcasing a cooperative and responsible approach.
This achievement underscores the FBR’s commitment to ensuring tax compliance and fair play in the business environment. The diligent efforts of officers like Kashif Hafeez not only contribute to revenue collection but also act as a deterrent to potential instances of tax evasion.
The successful recovery of such a substantial amount is expected to have a positive impact on the revenue statistics of the LTO Karachi, showcasing the effectiveness of targeted and strategic measures in bolstering the country’s economic resources.
As the FBR continues to intensify its efforts to identify and rectify instances of tax evasion, such cases serve as a reminder to all businesses – multinational or otherwise – to adhere to tax regulations diligently. This accomplishment reflects positively on the Pakistani tax authorities’ commitment to fostering a transparent and accountable financial system, ultimately contributing to the nation’s economic growth and stability.
