ISLAMABAD: The tax machinery detected 1,544 cases involving tax evasion, concealment and fraud of Rs76 billion in 2016, an official document shows.

In 2015, 675 such cases involving Rs47bn were detected, which shows growth in the number of investigations as well as the detected loss of revenue.

“There is still a lot for the department to achieve. I am positive that the trend of substantial growth in performance and achievement will continue in coming years,” said Tanveer Ahmad, director general of the Directorate General Intelligence and Investigation-Inland Revenue, which is the country’s premier anti-tax evasion and anti-fiscal fraud (income tax, sales tax and federal excise duty) investigation department.

The breakup shows the number of cases involving high net worth individuals investigated in 2016 was 399 against 101 cases in 2015. The revenue involved in these cases was over Rs10.82bn compared with only Rs1.22bn in the preceding year.

As many as 502 ‘other important’ cases were investigated in 2016 in contrast to 310 cases a year ago. The revenue involved in these cases was Rs42.47bn against Rs41.96bn in 2015.

In sales tax, the number of cases where evasion and concealment were detected in 2016 was 643 compared with 264 cases in 2015. The revenue involved in these cases was Rs22.37bn compared with Rs3.77bn in 2015.

The report shows that 70 taxpayers chose to voluntarily settle their cases of income and sales tax by depositing more than Rs2bn with the Federal Board of Revenue (FBR) in 2016.

Of these, 22 taxpayers were from Islamabad, 21 from Faisalabad, 11 from Lahore, eight from Karachi, five from Multan and three from Peshawar.

Besides, the tax investigation department carried out 44 searches and raids. Of these, 36 searches and raids were carried out in Karachi. The number of raids in Karachi is high, but these cases are either under scrutiny or sub judice. The amount of tax recovered was Rs56 million in just seven cases in Karachi.

In Islamabad, only two raids were conducted resulting in the recovery of the tax evaded amount. In two cases in Lahore, tax evasion of Rs323.26m was detected. Over Rs1.2bn was detected in three cases in Peshawar. These cases were transferred to the Peshawar-based regional tax office (RTO) for the recovery of the evaded tax.

As for sales tax, searches were carried out in almost 88 cases. Of these, 17 searches were conducted in Islamabad where the detected amount was deposited with the FBR.

As many as 19 cases were investigated in Karachi. Most of these cases remain sub judice. Only three of these cases were under scrutiny and an amount of Rs5m was recovered in only one case.

In Faisalabad, the number of sales tax cases was 24. Of these cases, collection was made in 15 cases while scrutiny was under way in others.

Out of the nine cases in Lahore, revenue of Rs46.36m was recovered in two cases.

In Multan, 11 cases of sales tax were investigated in which a tax of Rs37m was recovered only in three cases.

Under Federal Excise Duty Act 2005, six raids were made last year. The tax department seized 308 cartons of untaxed cigarettes of Frontier Leaf involving Rs5.08m, 300 cartons of Imperial Cigarettes involving Rs5.03m, 283 cartons of International Cigarettes involving Rs4.70m, 110 cartons of Indus Tobacco involving Rs1.82m, 300 cartons of Falcon Cigarettes involving Rs5.231m and 250 cartons involving tax evasion of Rs4.68m.

In all of these cases, the tax department recovered Rs4.7m from Imperial Cigarettes and Rs11m from Indus Tobacco.

Criminal proceedings were started in 11 cases. Under Sales Tax Act, nine FIRs have been lodged so far.

The focus of the investigations is real estate, property developers, sugar, fertiliser, ghee/vegetable oil, commercial importers, wholesalers and distributors, steel, soap, chemicals, cosmetics, tobacco, educational institutions, hospitals, services, paper and paper board.

Published in Dawn, April 30th, 2017