Islamabad – Pakistan is facing an alarming economic challenge, losing approximately $100 billion annually due to illegal economic activities such as tax evasion, smuggling, and counterfeiting, according to a newly launched study.
(more…)Tag: tax evasion
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Pakistan Can Curb Rs 1 Trillion Tax Leakages via Policy Enforcement
Karachi, March 29, 2024: In a bid to enhance the tax-to-GDP ratio and mitigate budget deficits, advocacy firm Mustehkam Pakistan highlights the urgency for Pakistan to address tax evasion and illicit trade, estimating losses exceeding Rs 1 trillion across key sectors.
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FBR Intelligence Uncovers Massive Sales Tax Evasion by Battery Manufacturers
Karachi, June 24, 2023: The intelligence and investigation office of the Federal Board of Revenue (FBR) has uncovered a significant case of sales tax evasion by battery manufacturers.
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IR Intelligence Launches Extensive Crackdown Against Fashion Designers for Tax Evasion
Karachi, June 23, 2023 – The Directorate of Intelligence and Investigation (Inland Revenue) – I&I IR, Karachi has intensified its efforts to combat the issuance of fake and flying sales tax invoices by the fashion designers.
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IR Intelligence Uncovers Massive Sales Tax Evasion by Esteemed Company
Lahore, June 22, 2023: The Directorate of Intelligence & Investigation (Inland Revenue) Lahore has unearthed a staggering case of sales tax evasion worth billions of rupees by a highly regarded company.
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Massive Tax Evasion Unveiled: Rs956 Billion Lost in Five Key Sectors of Pakistan
Islamabad, June 7, 2023: An international research body, Ipsos, has uncovered a staggering amount of Rs956 billion annual in tax evasion within five key sectors of Pakistan. The report shed light on tax evasion occurring in the real estate, tea, cigarette, tires and oil lubricants, and pharmaceutical industries.
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Tax evaders may be arrested without warrant
KARACHI: The tax authorities have powers to arrest tax evaders without warrants for concealment of income or assets.
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FBR authorizes IR Intelligence to access business premises
ISLAMABAD: Federal Board of Revenue (FBR) has authorized Directorate General of Intelligence and Investigation (I&I) to access business premises for detecting tax evasion and revenue leakages.
The FBR through a notification authorized the DG I&I IR to carry out intelligence activities, access and verification of business premises, access to record/documents or system maintained therein, intelligence gathering on all tax related issues including under-reporting, tax evasion and revenue leakages.
The directorate is authorized to collect information/record/documents from any person including taxpayer and third party-relating to financial transactions like investment and expenses etc. and details of persons who are involved in such activities.
The FBR directed the directorate to process information and take necessary action on the basis of information provided by any other organization, agency or department under the relevant provisions of Income Tax Ordinance, 2001.
Further, the directorate has been asked to utilize the information obtained through establishment of linkages by the Federal Board of Revenue with all major national, provincial other data bases to collect relevant information.
The FBR asked the DG I&I to identify cases of income tax evasion and carry out inquiry, investigation, whichever is deemed fit, to retrieve the loss of revenue; to identify, investigate and prosecute cases of tax evasion and/or offences punishable under the Income Tax Ordinance, 2001 and the rules made thereunder.
Further, the directorate is required to share and disseminate actionable information and corroborating evidence, where required, through written reports or information reports or otherwise to authorities or officers in the headquarters and field formations of the Federal Board of Revenue for further proceedings.
The FBR also authorized the DG I&I to process, investigate and prosecute complaints of tax evasion; to process, investigate and prosecute information shared by other agencies and to carry out any other work or function that may be assigned to it by the FBR.
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FBR issues rules for rewarding informers, officials on recovery of tax evaded money
ISLAMABAD: Federal Board of Revenue (FBR) on Friday issued rules to reward tax officials and informers on detection and recovery of evaded amount.
The FBR issued SRO 78(I)/2021 and said that officers and staff deputed to exercise powers, enforce and/or perform functions and duties in designated entities under the specified statutes and informers or whistleblowers.
According to the rules, the officers / members of staff in Inland Revenue detecting the tax evasion shall be eligible for lesser of 20 percent of the tax sought to be evaded or two years’ salary at the time of detection/filing of the detection report.
Further, officer/member of staff completing the adjudication/assessment the reward shall be lesser of 20 percent of the tax sought to be evaded or two years’ salary as at the time of completion of adjudication / assessment.
The FBR said that if no appeal/revision has been filed against the assessment, the whole of the admissible reward shall be paid immediately after expiry of limitation for filing of appeal/revision.
In case an appeal has been filed against the assessment order the admissible reward claim would be processed as: 50 percent upon confirmation at first appeal forum; and 50 percent upon completion of appellate process on point of fact i.e. Appellate Tribunal Inland Revenue (ATIR).
The reward shall be paid only if the tax sought to be evaded has been recovered at least to the extent of 50 percent of the tax sought to be evaded.
In case detection and assessment have been made by the same officer, he shall be entitled to the reward of the lesser of 20 percent of the tax sought to be evaded or three years’ salary as at the time of detection / filing of the detection report.
In case there are more than one claimants of reward on account of detection or assessment, the reward would be apportioned as per the recommendation of the chief commissioner or director general concerned.
An informer / whistleblower in terms of clause (v) of rule 2 shall be entitled to a reward at the rate of 20 percent up to a maximum of Rs5 million of the tax sought to be evaded in a single case.
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Tax authorities capture huge cash transactions of dress designers; start assessment
KARACHI: Tax authorities have captured millions of rupees cash transactions by many dress designers. The authorities are now making assessment on the basis of such transactions for imposing income tax for past five years, sources said on Wednesday.
The sources said that the tax authorities had captured the cash transactions while disguising themselves as customers during their visits to those places where mostly wedding dresses were being displayed for sale.
Regional Tax Office (RTO) II, Karachi, a revenue collecting arm of Federal Board of Revenue (FBR), identified such dress designers, who were evading income tax. The office issued notices to explain the reasons of very low amount of tax payment or no payment of tax at all.
The tax office during survey found that there was a sector of marriage dress designers, who charge exorbitant amount for the bridal dress making.
Some of the designer even charge millions for a single dress but when their income tax returns were analyzed it was found that quite a large number of these dress designers are paying very meager amount of tax i.e. their declared income does not commensurate with their receipts.
Some of them are even not on tax roll.
The RTO-II Karachi identified the following dress designers:
01. Shehrnaz
02. Nada Tai
03. Aisha Ahmed
04. Wardha Saleem
05. Sanam Chaudhri
06. Sania Maskatiya
07. Cartes by Pasho
08. Silhouettes by Ash & Uzma
09. Nida Azwer
10. Waqar J. Khan
11. Kavalier Laser Cut Innovations
12. Rozina Munib
13. Ayesha Sarfaraz
14. Farida Qureshi
15. Saleha
16. Mahin
17. Natasha Kamal
18. Basic
19. Sarah Arshad Gilani
20. Amna Chaudhry
21. Chikankari
22. House of Farah V
23. Sable Vogue
24. Zuri by Zainab Fawad
The sources said that the returns of above were being analyzed and desk audit was being conducted.
The information obtained about their income would be cross matched with declared income and wealth statement filed and withholding statement filed by withholding agents.The tax office estimated huge loss of revenue would be detected.
Notices under section 176 of Income Tax Ordinance, 2001 have been issued and further progress would be finalized by February 27, 2020.