Tax officials suspicious of Afghan rice trade

Detect over Rs100m tax evasion in exports to neighbouring country

PESHAWAR: Officials of the income tax department have detected over Rs100 million income tax pending against some businessmen involved in rice trade with their counterparts in Afghanistan.

“This is not only tax evasion, but the department fears that the rice business is just eyewash and is most probably being done in order to launder money outside the country,” a senior official at the Regional Tax Office (RTO) Peshawar revealed.

The official, requesting anonymity as he was not authorised to talk to the media, said there were apprehensions that the said businessmen might have nexus with organised crime that may warrant action under the National Action Plan (NAP).

An official privy to the development stated that the department served show-cause notices to traders who had failed to clear their income tax dues. The department also asked upon the defaulters to submit evidence if the tax was paid.

Despite repeated notice, however, the identified businessmen failed to submit any details of paying income tax. “Now, we are in the final stage and we are all set to take action under Income Tax Ordinance,” he said.

The official, who requested anonymity since he was not entitled to speak to media stated that the department was under severe pressure but will never step down since they feared the business was done in order to launder money.

“There are many chances that the rice imports and export was just eyewash and in fact the businessmen were involved in money laundering,” the official said.

Exporters and importers involved in the business were detected by the Withholding Zone of RTO with liability on account of non-deduction of taxes amounting to over Rs100 million as required under section 153 of the Income Tax Ordinance, 2001 which might enhance as a result of further probe.

“Cross-border business with Afghanistan has a huge revenue generating potential which remained untapped due to either negligence of the relevant authorities or because of them being in connivance with the businessmen,” the official informed.

He stated that however the intervention by the RTO Peshawar on the information of some reliable insiders where not only taxes evaded worth millions of rupees will be recovered but will also help identify businessmen involved in other illegal activities since long.

Published in The Express Tribune, January 24^th, 2019.