FBR removes officers on corruption charges

Revenue board misses 11-month tax collection target by Rs36b

ISLAMABAD:

The Federal Board of Revenue (FBR) on Friday removed the heads of two field formations in Lahore along with a couple of other officers due to their alleged dubious role in sales tax refund and ordered a fact-finding inquiry to determine the veracity of allegations.

These officers were allegedly involved in taking kickbacks for issuing the Refund Payment Order (RPO) to a company manufacturing electronic goods. The FBR has also informed the Prime Minister’s Office about the action taken in the alleged corruption case, a top FBR official told The Express Tribune.

The development came amid the challenge of collecting Rs43 billion per day in June to meet the annual tax target after the revenue board missed the 11-month goal by a wide margin. It received Rs8.12 trillion in taxes during July-May 2023-24, falling short of the target by Rs36 billion.

The FBR issued a notification for removing the chief commissioner of Large Taxpayers Office (LTO), Lahore, chief commissioner of Regional Tax Office (RTO), Lahore and commissioner of LTO, Lahore. It issued another notification for suspending the deputy commissioner of RTO.

There was a dispute over the alleged distribution of money being taken for issuing the refund order, the FBR official said.

The FBR has ordered an inquiry, its spokesman Bakhtiar Muhammad said on Friday. It has removed one Grade-21 officer, two Grade-20 officers and one Grade-18 officer. A three-member fact-finding committee has been set up, headed by Muhammad Abid Raza Bodla, Chief Commissioner of Corporate Tax Office, Lahore.

Bakhtiar Muhammad said that based on a social media campaign, the FBR took proactive action by removing the officers facing allegations so that a fair inquiry could be made.

The dispute involving the two major tax offices underscores the need for continuing Prime Minister Shehbaz Sharif’s campaign to weed out corrupt elements from the FBR. It seems that the FBR people have remained undeterred despite the PM’s action to remove 25 officers due to their inefficiency and bad reputation.

One of the officers removed on Friday was placed in B-category during the classification of FBR officers from A to D categories by the intelligence agencies, which was carried out on the instructions of the prime minister.

FBR Chairman Amjad Zubair Tiwana told The Express Tribune that he would personally make sure that the case was thoroughly investigated without any fear and favour and the matter would be taken to its logical end.

Meanwhile, the FBR collected Rs8.12 trillion in taxes during July-May 2023-24 with a 31% growth rate. The collection was Rs1.9 trillion higher than the last fiscal year. However, it missed the 11-month goal by Rs36 billion.

It now needs to collect Rs1.292 trillion in June to achieve the annual target of Rs9.415 trillion. Average daily collection will be around Rs43 billion compared to Rs24 billion per day collected so far. This shows that the FBR is going to miss its annual target by a wide margin.

For May, the government had set the tax target at Rs745 billion, which was exceeded by Rs15 billion. Income tax collection amounted to Rs3.85 trillion during the first 11 months of FY24, up 41%.

Sales tax collection reached Rs2.77 trillion, higher by Rs453 billion, or 20%. But it was far lower than the prevailing inflation rate. The FBR collected Rs452 billion in federal excise duty, which was Rs177 billion, or 55%, higher than the previous year. The collection on account of customs duty reached Rs994 billion, up Rs169 billion, or 21%. However, customs duty collection was significantly lower than the target, which was compensated by the higher collection of domestic taxes. The Customs is constantly falling short of its targets due to restrictions on imports.

The FBR said that the growth in domestic taxes had been calculated at 43% during May, which was very impressive. It has been the policy of the government to mobilise more resources from domestic taxes, it added. The FBR claimed that it was poised to achieve the assigned target for the last month of the current financial year.

Published in The Express Tribune, June 1^st, 2024.

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