Rs800b tax refund fraud unearthed, says PM Shehbaz

ISLAMABD:

Prime Minister Shehbaz Sharif on Thursday instructed that the number of Appellate Tribunals be increased to 100 to expedite the resolution of tax cases.

Chairing a review meeting on reforms and digitization in the Federal Board of Revenue (FBR), the prime minister also directed an increase in the number of Appellate Tribunals for Customs cases and the creation of a dashboard to evaluate the performance of Tax Appellate Tribunals.

The prime minister stated that tax refund fraud amounting to Rs800 billion was uncovered in the past four months, and emphasized further improvements to the tax refund system.

The prime minister expressed that increasing revenue was achievable through reforms in the FBR. He lamented the unfortunate and unnecessary delays in many of the FBR’s reform projects.

The prime minister emphasized zero tolerance for delays in sales tax refund payments and instructed the immediate formulation of a strategy to recover unlawfully issued refunds.

The prime minister directed the complete digitization of the Fraud Detection and Investigation Department of the FBR and the development of a strategy to centralize all ongoing reform projects within the FBR.

The prime minister instructed the relevant authorities to employ the latest technology and the best personnel for the digitization of the FBR.

The prime minister instructed the implementation of a unified sales tax system for all taxpayers by October 2024.

The prime minister was briefed that a unified sales tax return system, successfully implemented by the telecom sector, was being introduced for taxpayer convenience. FBR aimed to integrate with revenue authorities across the country through a unified sales tax platform.

The prime minister assured timely funding for upgrading the customs system and directed the FBR to devise a strategy for designing and implementing the new software system.

The prime minister was informed about the reforms in Inland Revenue and Customs, along with the progress achieved in digitizing the FBR in the last eight weeks.

The prime minister was informed that McKinsey, a globally recognized consultant, was overseeing the digitization process of the FBR, and positive outcomes from this initiative have begun to surface.

The PM was informed that there were 83,579 tax-related cases amounting to Rs3.2 trillion pending in various courts and tribunals.

It was conveyed in the forum that during the current government’s tenure, several initiatives have been undertaken to handle tax cases. In the past four months alone, courts have settled 63 cases amounting to approximately Rs44 billion.

The prime minister was briefed that modern technology has identified 4.9 million individuals capable of paying taxes. Prime Minister Shehbaz Sharif instructed to prioritize bringing wealthy individuals and capitalists into the tax net, ensuring no additional burden on the poor.

During the briefing, the PM was informed that since April 1, 2024, 150,000 retailers have been registered using the FBR Trader Friendly mobile phone application.

The PM instructed to maintain consultations with retailers to enhance the effectiveness of this system. The prime minister also instructed to prepare proposals for reforming the Pakistan Revenue Automation Authority (PRAL).

The PM was informed that the implementation of the Integrated Transit Trade Management System (ITTMS) project was scheduled to commence from October 2024. Under the ITTMS initiative, International Standard One-Window Facilitation Centers were being set up at the Pak-Afghan borders of Torkham and Chaman.

The development of the Customs Automated Entry-Exit System (AEES) has commenced. AEES will utilize cutting-edge scanning technology and integrate with the web-based One Customs and Pakistan Single Window platforms.

The forum was informed that initially, AES will be rolled out at four ports in Karachi and airports in Karachi, Multan, and Peshawar.

The Prime Minister directed the implementation of the AES system at Gwadar Port as well.

Present in the meeting were Federal Minister for Economic Affairs Ahad Khan Cheema, Federal Minister for Finance and Revenue Muhammad Aurangzeb, Federal Minister for Law and Justice Azam Nazeer Tarar, Federal Minister for Information and Broadcasting Attaullah Tarar, Minister of State for Finance Ali Parvaiz Malik, Deputy Chairman Planning Commission Jehanzeb, Khan, Prime Minister’s Coordinator Rana Ihsan Afzal, Chairman FBR Malik Amjad Zubair Tiwana, and other senior government officials.