Sugar mill owners evaded taxes worth billions

Created two accounts – external to dupe tax authorities and internal to record actual sale


Talib Fareedi April 12, 2020
Reuters file photo of sugar

LAHORE: Further investigations into the recent sugar crisis in the country have revealed that the mill owners not only created an artificial shortage of the commodity to bump up its rates but also evaded taxes worth billions of rupees.

The investigation was conducted by the Federal Investigation Agency (FIA) on the directives of Prime Minister Imran Khan.

Sources in the investigation commission said that the FIA has seized all records of the mill owners. “According to the seized records, the mill owners had two accounts – external and internal. The external account was being used to dupe the tax authorities into believing that the mills owners had sold a meager amount of sugar to dealers while the details of the actual sale, which was far more than shown, were in the internal account,” said the sources.

The sources further said the investigation commission checked the records of a mill owner and found out that a dealer was sold sugar worth Rs480 million while the external account showed that the deal was made for Rs3.6 million.

In this way, the mill owner saved Rs470.64 million, ie paid tax on selling sugar worth Rs3.6 million and not Rs480 million.

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This was just one entry of a mill owner. For the last five years, billions of rupees have been made by these sugar mills through the double-account system.

An FIA official, on the condition of anonymity, said, “Till now, records of 89 sugar mills have been seized and they are owned by leaders of the N-League, Q-League, Peoples Party, PTI or retired officers of sensitive institutions.”

The official said, “These mill owners belong to political parties that are rivals, but when it comes to minting money, all political differences are shunned.”

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He said that efforts were being made to complete the inquiry by next week and submit a report to Premier Imran.

He said that if the production capacity of plants, stock and accounts of private dealers are taxed, the amount would cross that of the subsidy, and that too multiple times.

When The Express Tribune contacted FIA Director Punjab Zone-I Dr Rizwan, his spokesperson said, “Inquiry is under way and we have just seized the records and given it to the investigation commission. We have no idea what will come out of it.”

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