FBR prepares to audit sugar mills

Concerned officers have been empowered to initiate legal action based on sugar commission findings

LAHORE:

The Federal Board of Revenue (FBR) is preparing to take action against sugar mills in line with the report of the Sugar Inquiry Commission, The Express Tribune has learnt.

The graft watchdog has decided to subject all mills to an audit while empowering senior officers to initiate legal action based on the commission’s findings, sources privy to developments said.

According to sources, FBR will begin its line of action by scrutinising the financial records of all sugar mills from 2015 onwards. They added that all Inland Revenue chief commissioners have also been instructed to take legal action against mills over issues identified in the commission’s report. “The instructions have already been passed onto FBR field formations,” an official said.

Commissioners of Inland Revenue deputed in areas with sugar mills will prepare a report on the income and sales tax, and federal excise duty collected from the mills by July 10, while deputy and additional commissioners will collect financial records of mills by July 25, sources said. Concerned officers will also prepare audit reports on the mills by August 20 and concerned FBR teams between will answer mill owners’ objections between then and September 20, they added.

Sources said FBR field formations have identified legal issues based on the commissions report and have sent a final compliance form for approval. The graft watchdog, meanwhile, has been instructed to send a report on sugar to the Member Inland Revenue every 15 days so that further action can be initiated, if needed.

Speaking to The Express Tribune, FBR Spokesperson Dr Hamid Atiq said “The

FBR continuously works on cases wherever some tax irregularities are found.”

“Our officers were part of the Sugar Commission and most of the malpractices pointed out in the report are of the type on which the FBR was already working,” he said. “The only new thing pertains to some factual observations of the report based on statements of some buyers or benamidars.”

According to Atiq, for tax audits the field officers need to corroborate these statements under the provisions of Income Tax Ordinance 2001 and Sales Tax Act 1990. “The scrutiny of all cases of sugar mills showing audit risks as well as other businesses are underway and shall take their legal course as defined under the law. All actions of FBR are appealable in four stages, the last being the Supreme Court,” he said.

“Under tax laws, tax proceedings against any taxpayer are privileged and confidential and any leakage of individual information without sanction of law is a punishable crime. The FBR does its work in a discreet manner and strictly according to law,” the spokesperson added.

Published in The Express Tribune, July 5^th, 2020.