Financial discrepancies within FBR cost Rs102 billion

The FBR is to present its audit report’s findings at a meeting of the Public Accounts Committee (PAC) on Tuesday.

LAHORE: The Federal Board of Revenue (FBR) has revealed a loss of Rs102.2 billion in revenues attributed to financial irregularities and corruption within the organisation for fiscal year 2008-09.

The FBR will present its audit report’s findings at a meeting of the Public Accounts Committee (PAC) on Tuesday. The PAC will hold meetings till October 31 to discuss the audit report.

The largest contributor to these discrepancies was the dishonouring of indemnity bonds, bank guarantees and encashment schemes for post-dated cheques within the tax collection board. The discrepancies were valued at $989 million, which is more than Rs80 billion.

The undervaluation of goods cost the FBR Rs3.03 billion in sales tax revenue while the disbursement of tax refunds without a proper post-refund audit cost the board Rs1.65 billion. The misclassification of goods for purposes of tax evasion further dented revenue by Rs1.16 billion.

The national exchequer was also hit by an amount of Rs9.47 billion due to the failure to recover dues from the government even after the completion of adjudication processes.

A further loss of Rs3.63 billion resulted from the incompletion of the adjudication of cases. Losses of Rs712 million and Rs168 million were attributed to the failure to fine those who did not file taxes and fine those who did not fully pay their due taxes.

Improper payment of refunds, paying refunds after deadlines have passed and failure to implement fines on the breach of deadlines cost the FBR Rs686 million. The failure to clear cars and goods for taxation purposes and the failure to tax those entities that have a turnover above the threshold for sales tax also cost the exchequer Rs916 million.

Published in The Express Tribune, October 19^th, 2010.