Karachi, September 12, 2023 – The Regional Tax Office (RTO) Karachi has taken a significant step in the fight against tax fraud by registering a First Information Report (FIR) to initiate formal legal proceedings against individuals involved in a massive fake sales tax invoice scam, which has led to a staggering loss of approximately Rs 312 billion to the national exchequer.
(more…)Tag: flying invoices
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Prime Minister directs authorities to focus on flying invoices
ISLAMABAD: Prime Minister Imran Khan on Friday directed the authorities to curb the menace of flying invoices to prevent tax losses.
The prime minister chaired a meeting on tax reforms and said the objective of tax reform was to make the tax code simple, plug existing loopholes in the system and reduce discretionary powers of tax collectors and tax practitioners, according to state media.
He called for structuring and reforming the tax regime to facilitate the common man and businesses to help the economy grow.
Prime Minister Imran Khan called for introducing automation to ensure transparency of the tax system.
He directed to especially focus on the issue of flying invoices.
The meeting was attended by Federal Ministers Makhdoom Khusro Bakhtiar, Dr. Abdul Hafeez Sheikh, Asad Umar, Hammad Azhar; Advisers Abdul Razzak Dawood and Dr. Ishrat Hussain; Special Assistants Dr. Waqar Masood, Tabish Gohar and Nadeem Babar, Chairman Board of Investment and other senior officials.
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FBR to reward for identifying fake, flying invoices
ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday announced to give reward money to those people who identify culprits involved tax evasion through fake and flying invoices.
A statement issued by the revenue body said that it had encouraged the people to come forward and reveal the identity of the people who are involved in causing tax evasion by using fake and flying invoices.
“FBR will grant reward to such whistle blowers under its Reward Rules,” it said.
The name of the whistle blowers will be kept secret.
The information can be given to the Director Intelligence and Investigation Inland Revenue on office number 0519260167 and fax number 0519260156.
The FBR announced in the wake of strict action launched against tax evaders involving in fake and flying business.
In this regard FBR chairman issued directions to all the FBR field offices to expedite operation against tax evasion and play active role to stop the menace of fake and flying invoices.
Meanwhile, implementing the directions, the Karachi Field Office of FBR has taken action against a fake business unit which was involved in evading duties and taxes at import stage under SRO 1125.
The said unit was also issuing fake and flying invoices in the market due to which the buyers were claiming input adjustment and refunds.
The said unit has committed tax fraud and caused heavy loss of Rs. 210 million to the pubic exchequer. The principal accused Mubarak Khan has been arrested.
Similarly, another case of tax evasion of Rs. 105 million has been unearthed. The tax evasion was taking place by issuance of fake and flying invoices.
FBR Multan office has confiscated the counterfeit and non-duty paid cigarettes. In another case, FBR Karachi office has received a complaint of Rs. 1 billion money laundering. The investigations are underway.
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CRTO Karachi sets up monitoring cell to identify fake, flying invoices
KARACHI: In order to identify taxpayers involved in fake and flying invoices, a monitoring cell has been established at Corporate Regional Tax Office (CRTO) Karachi.
The cell has been established keeping in view the declining trend in sales tax payments during first quarter (July – September) 2019/2020.
The monitoring cell has been assigned to identify cases involved in fake and flying invoices, fake transactions, sales suppressions and streamline tax mechanism.
Jafar Raza Kazmi, Commissioner Inland Revenue, Zone-IV of the CRTO has been assigned to supervise the monitoring cell.
According to a notification issued on Thursday, the cell would perform the following functions:
— To analyze / monitor sales tax monthly sales tax returns to identify cases where action under Section 38 of the Sales Tax Act, 1990 is required to be taken on the basis of abnormalities causing huge decline in sales tax payment etc.
— The cell shall prepare desk audit report showing details of records / data scrutinized discrepancies observed and potential revenue involved.
— After due diligence, the cell shall take action under Section 38 of the Sales Tax Act, 1990 against the person as per law and submit the detailed report with impact of revenue to the chief commissioner CRTO Karachi.
The monitoring cell will focus and take such cases for action under Section 38 of the Sales Tax Act, 1990, which may yield substantial revenue.
The cell has been strictly advised that action in specific cases should be taken with reasonable interval of time. The exercise should not be made frequently and be restricted to cases involving sizeable revenue leakages.
Section 38: Authorised officers to have access to premises, stocks, accounts and records –
Sub-Section (1) Any officer authorised in this behalf by the Board or the Commissioner shall have free access to business or manufacturing premises, registered office or any other place where any stocks, business records or documents required under this Act are kept or maintained belonging to any registered person or a person liable for registration or whose business activities are covered under this Act or who may be required for any inquiry or investigation in any tax fraud committed by him or his agent or any other person; and such officer may, at any time, inspect the goods, stocks, records, data, documents, correspondence, accounts and statements, utility bills, bank statements, information regarding nature and sources of funds or assets with which his business is financed, and any other records or documents, including those which are required under any of the Federal, Provincial or local laws maintained in any form or mode and may take into his custody such records, statements, diskettes, documents or any part thereof, in original or copies thereof in such form as the authorised officer may deem fit against a signed receipt.
Sub-Section (2): The registered person, his agent or any other person specified in sub-section (1) shall be bound to answer any question or furnish such information or explanation as may be asked by the authorised officer.
(3) The department of’ direct and indirect taxes or any other Government department, local bodies, autonomous bodies, corporations or such other institutions shall supply requisite information and render necessary assistance to the authorised officer in the course of inquiry or investigation under this section.