FBR called ‘most corrupt’, CCP termed ‘toothless’

Owners of 1 out of every 10 vehicles cleared under 2012 amnesty scheme got away with paying less tax

ISLAMABAD: A parliamentary body echoed growing public opinion and mistrust over the performance of the country’s tax and antitrust watchdog departments, declaring the Federal Board of Revenue (FBR) as “the most corrupt” and the Competition Commission of Pakistan a “toothless” body.

Proceedings of the Senate Standing Committee on Finance and Revenue revealed that the FBR charged less than notified duties on every one out of 10 vehicles cleared under an amnesty scheme of 2012.



After the Federal Tax Ombudsman caught tax authorities red handed, the FBR is now recovering these lost duties from the owners of these vehicles - four years after the expiry of the scheme. During this period, many vehicles changed hands and new owners are now forced to pay for the sins of the FBR, said Senator Jehanzeb Jamaluddin.

Out of 51,201 vehicles the FBR had cleared under the amnesty scheme, it charged less than notified duties on 5,109 vehicles from owners, FBR Chairman Dr Mohammad Irshad informed the committee. The Pakistan Peoples Party government had offered the amnesty scheme to register the smuggled vehicles. The FBR earned Rs16.2 billion as revenue on registration of these vehicles.



The FBR chairman had blamed the owners for not properly declaring the model and engine capacity of these vehicles. He said that now the Customs Department was collecting these duties from the owners.

“Your department is the most corrupt department in Pakistan,” said a visibly angry Saleem Mandviwalla, chairman of the Standing Committee, to the FBR. Senator Mandviwalla said the FBR officials must have minted money from the owners of these vehicles. He said that now the FBR should recover the lost revenues from its officers instead of penalising current owners.

However, the FBR chief denied these allegations. Last month, he had said that the FBR was as corrupt as the society, saying that singling out the department alone was not fair.

Dr Irshad insisted that the Custom Act allows the recovery of lesser tax. But the law authorises to recover taxes up to three years after the transaction while the scheme had been offered four years ago.

The Committee directed the FBR to withdraw all those notices that have been given after expiry of the three-year period.

CCP 

The standing committee was also not happy with the CCP - the body that has a legal mandate to ensure competition and fair play in the economy.

“The CCP is a real toothless Commission that has failed to crackdown against big cartels,” said Senator Mohsin Aziz. He said that the CCP was sleeping when automobile assemblers and cement manufacturers were fleecing the consumers.



The CCP can only go after small parties like tea sellers and chicken shops, said Senator Aziz while taking a jibe on the Commission’s failure to move against big groups.

The CCP is fighting a case for its survival as the industries that have been fined have challenged the existence of the antitrust watchdog in the courts, said Vadiyya Khalil, the chairperson of the Commission. She said that the Commission has imposed fines on cement, sugar and automobile cartels but courts have given stay orders.

CCP’s Member Legal Ikram Qureshi said that the Lahore High Court has not announced judgment for the last six months in a case filed to challenge the existence of the CCP.

The standing committee decided to call the Attorney General of Pakistan to seek his support to make the CCP a functional and effective body.

Published in The Express Tribune, April 14^th, 2017.

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