Whistleblower awaits reward in tax evasion case

Exposed MNC's tax evasion two-years ago in which FBR collected Rs2.5b

ISLAMABAD:

As Prime Minister Shehbaz Sharif this week showers money on a taxman for stopping a Rs290 billion fraud, a whistleblower, who risked his job to expose multibillion-rupee tax evasion by a multinational company (MNC), has been waiting for his promised reward for two years.

The irony is that the man who provided inside information has been denied the reward, while the tax officers who recovered the amount based on his information have already claimed the bounty. Inaam (name protected due to the sensitivity of the matter) helped the Federal Board of Revenue (FBR) uncover tax evasion by M/s Coca Cola Export Corporation, official records show. After the FBR recovered taxes estimated at around Rs2.5 billion, the whistleblower sought his reward money.

However, despite acknowledging his role, the government has not yet paid him his lawful share, while the then-chief commissioner of the Large Tax Office Lahore and his staff have availed the rewards in the same case.

The individual is registered with the FBR as a whistleblower, and even the Federal Tax Ombudsman (FTO) has ordered the FBR to pay him his due share, but to no avail. Prime Minister Shehbaz Sharif, this week, praised Ijaz Hussain, a senior FBR officer, for his extraordinary integrity in exposing a Rs290 billion sales tax scam.

A press statement from the PM's Office released on Thursday stated that, in an effort to encourage other FBR officials to cleanse the organisation and eradicate systemic corruption, PM Sharif awarded Hussain Rs5 million in cash for his exceptional act of integrity. During a meeting with the official and other senior FBR officials, Sharif declared, "There is no shortage of honest and competent officers in the FBR," adding, "Their efforts must be acknowledged." He directed the FBR to avail the services of a highly qualified legal team to probe the detected tax fraud and bring the offenders to book, saying, "Tax theft should not be tolerated in any way."

During his desk analysis, Hussain uncovered the Rs290 billion tax evasion plan, out of which Rs370 million had already been disbursed by the FBR. The credentials of an 80-year-old woman were used for the sales tax fraud, which Hussain identified on March 4 this year.

It was reported that under the sales tax fraud, Rs370 million was initially transferred, of which Rs50 million has been recovered as the main culprit has been arrested.

However, the FBR is unwilling to honour its commitments and the law by denying the reward to a person who helped uncover tax evasion by an MNC. The whistleblower has also filed a complaint under the Federal Tax Ombudsman Ordinance against the non-processing of his reward claim.

The FTO documents stated that the complainant, a whistleblower, pointed out tax evasion by M/s Coca Cola Export Corporation. It added that the complainant was registered with the FBR as a whistleblower and had reported massive tax evasion by M/s Coca Cola Export Corporation Pakistan Branch in the tax years 2017 to 2021.

The FTO stated that, based on the complaint, the FBR recovered a substantial amount of evaded tax. The complainant contended that he had assisted the FBR's Intelligence & Investigation wing and senior management, but they are now refusing to process his reward claim.

The individual has approached the FBR multiple times for the sanctioning of the reward money, but to no avail.

He has recently requested the FTO to direct the chairman of the FBR to sanction his due reward.

In September this year, the chief commissioner of the Large Tax Office Lahore confirmed the issue but said the matter pertained to the office of the director general (Intelligence & Investigation) IR, Islamabad, as that office had forwarded the claim of the complainant's reward to the Board.

The Intelligence & Investigation office has forwarded the complainant's reward claim request to the Member-Inland Revenue Operations of the FBR for further necessary action under the relevant laws and rules. However, no action has been taken by the Member-IR Operations, FBR. The FTO has advised the FBR to process the complainant's request within a reasonable time.