Axact moved more than Rs8 billion in tax-free, foreign currency from Dubai to Pakistan over the last four years, a Federal Investigation Agency (FIA) probe has revealed, as the bureau prepares to register cases of money-laundering, tax evasion and illegal use of cyberspace against the IT company.
Investigators scrutinising Axact’s financial records, including audit reports and balance sheets, said the company transferred foreign exchange worth Rs1 billion to Pakistan in 2011. This amount, they said, was presented as income from the sale of software and IT-related services. The company moved the funds without paying any tax by taking advantage of government concessions aimed at promoting software export.
In 2012, Axact moved thrice the amount to Pakistan, investigators said, avoiding tax using the aforementioned concessions. The company continued this practice over subsequent years until, by 2014, it had moved as much as Rs8 billion to Pakistan without paying any tax on the income, they added.
According to investigators, the money was transferred to Pakistan via Dubai through transactions involving a few hundred to thousands of dollars.
Sources said Axact is adamant that this foreign exchange was generated by the sale of software and IT services.
But investigators said the company has failed to provide documentary evidence to back up the claim. If the income was generated from any means other than the sale of software and IT services, then Axact has committed money-laundering, they added.
FIA officials are preparing to lodge three to four cases against Axact on charges of money-laundering, tax evasion and illegal use of cyberspace based on irregularities found in the company’s financial records. The agency’s IT and forensic experts have also collected important evidence from emails and computers, sources said.
The FIA director is set to present a comprehensive report on evidence against Axact collected so far to Interior Minister Chaudhry Nisar Ali Khan today (Saturday), they said. A decision on whether cases will be registered immediately or if investigators will be given more time to collect additional proofs will be taken after the meeting, the sources added.
Published in The Express Tribune, May 23rd, 2015.