Financial experts believe that officials tasked with generating revenue have instead aided a large number of people to evade duty and taxes by allowing use of non-assessment and short-assessment. – File Photo

ISLAMABAD: Auditors have unearthed tax evasion and irregularities of more than Rs209.797 billion in 50,000 cases over the past few years.

Experts say the dodging of such a huge amount is not possible without official connivance.

They believe that officials tasked with generating revenue have instead aided a large number of people to evade duty and taxes by allowing use of non-assessment and short-assessment.

Besides delay in adjudication proceedings, non-recovery of adjudged revenue and inadmissible tax adjustment have been allowed there to get away with evasion.

The office of the Auditor General of Pakistan in its audit report for the year 2010-11 for indirect taxes has unearthed irregularities of Rs198.686 billion.

This amount includes Rs84.454 billion audit observation in respect of compliance to audits of receipts and expenditures of FBR for the year 2019-10.

The Rs114.232 billion irregularities/evasion related to the performance audit from July 2007 to April 2010.

The report for year 2010-11 on direct taxes (income tax) shows irregularities and evasion of Rs11.111 billion.

About indirect taxes, the report observes that undue exemption/benefit granted to sugar tycoons in 80 cases in the year 2009 led to a revenue loss of about Rs14.956 billion.

This happened because the FBR did not review notifications allowing relief in sales tax in the shape of fixation of price, causing a loss of Rs8.437 billion approximately in 40 out of the 118 sugar mills in the country.

The government suffered a loss of Rs5.744 billion because of sales tax exemption.

The auditors found non-recovery of arrears of Rs70.198 billion in 4,237 cases. Irregularities of Rs48.777 billion were attributed to weak internal controls in 9,201 cases. The cases were mostly related to non-recovery of duty and taxes from people who had either got their goods cleared without paying duty or taxes.

The recoverable revenue of Rs25.020 billion was not detected by the e-FBR system which provides for e-filing of sales tax returns containing data of sales/purchases in respect of filers. However, there were no business rules (procedures) for cross matching corresponding sales/purchases of registered persons.

The auditors pointed out 348 cases of payment of excess refunds amounting to Rs11.653 billion.

The refunds were made owing to inadmissible tax adjustments. Rules and regulations were not followed in sanctioning refunds to the people.

An amount of Rs17.392 billion was noticed in 5,438 cases because of non- or short-realisation of government revenue, Rs3.523 billion as blockade of government revenue due to non-adjudication in 168 cases and Rs446.060 million inadmissible exemptions and concessions in duties and taxes were granted.