FBR unearths Rs140m refund scams

Farhan Zaheer April 15, 2010

KARACHI: The Federal Board of Revenue (FBR) has unearthed two scams worth Rs140 million involving fake invoices and adjustments for getting refund, officials say.

Two fake companies have been identified that had been registered with fake identity and addresses, Ghulam Hussain, Senior Auditor, FBR told The Express Tribune. The companies were involved with over 200 others companies in refund and tax adjustments, said Hussain. He added that on going investigations were revealing further inconsistencies.

The FBR has already started recovering the money, he said. Industrialists say that such cases are possible only when companies work in connivance with FBR officials. Last week, FBR officials issued notices to 1,600 companies and asked for their six-year tax records, but after businessmen’s resistance, it reissued the notices to only 102 suspected companies.

The two fake companies were in addition to the 102 companies which got notices recently. M A Jabbar, former chairman of SITE Association of Industry, said “fraud cases of refund and adjustments are not possible without the help of FBR officials.”

“Why should only the industry be blamed for such fraud, FBR officials were equally responsible and they should be brought before public equally like the industry,” Jabbar said firmly, adding that fraud cases in invoices come forward only when honest FBR officers come and perform internal audits.

Disciplinary action should be taken against both parties and both should be exposed to curb these fraud cases, he suggested. Mian Zahid Hussain, former chairman of Korangi Association of Trade and Industry (KATI), said over phone from Islamabad that industrialists support the FBR against fraudulent companies but this does not mean that genuine taxpayers are harassed.

“This harassment will hurt investor confidence,” he added. “Today (Wednesday) we met FBR chairman and discussed the issue of harassment. He assured us that only because of few fraudulent companies the rest will not be disturbed in future,” said Hussain.

“I myself raised this issue before the FBR director intelligence and investigation, Zahid Khokhar, so that harassment of genuine taxpayers could be stopped,” he added. “Genuine taxpayer confidence has been shattered because of FBR notices and we reject this practice by FBR officials. We are cognizant of our duty to pay taxes but the government should also take responsibility on its part,” he said. “The FBR should take action against fraudulent companies but first identify the companies and then take action against them,” he added.

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