ISLAMABAD: President Dr Arif Alvi on Wednesday censured the Federal Board of Revenue (FBR) for leaking the whistle-blower’s identity to the tax-evading private company which allegedly committed financial irregularities.

The president ordered the FBR to submit a report within 60 days and also explain why the board failed to fully utilise the information provided by the whistle-blower to recover the maximum sales tax amount from the company that caused losses to the national exchequer.

While rejecting a representation filed by the FBR against the order of the Federal Tax Ombudsman (FTO), Mr Alvi said this is abhorrent to the whistle-blower concept and legislation. Instead of taking advantage, the FBR has been very lax in its attitude.”

The whistle-blower had reported large-scale tax evasion by a private company to the FBR by risking his life, and resultantly received threats from the company.

Mr Alvi also directed FBR to revisit its relevant assessment order and provide the whistle-blower with an opportunity for a hearing.

The complainant Muhammad Ilyas, serving as an Accountant in M/s Northern Toolings (Pvt) Ltd, reported to FBR that the company was indulged in various financial irregularities by maintaining bank accounts in the names of its employees, concealing warehouses with undeclared stock, less tax payment, and under-invoicing at import stage using similar names and style of another company, and thus, causing huge losses to the national exchequer.

The FBR initiated proceedings against the company and recovered Rs15.251 million, however, the amount recovered was too short due to the inefficient use of annexures provided by the complainant.

The employee had filed complaints to the FBR chairman regarding tax evasion, however, after not getting any results, he took up the matter with FTO.

During the proceedings of the ombudsman, the FBR raised objections over the jurisdiction of FTO on the ground that the issue related to the determination of liability of tax and interpretation of laws, rules and regulations with respect to which legal remedies were available.

FBR further contended that the whistle-blower had submitted his written statement regarding tax evasion of Rs5m and all the information provided by him was confronted and an appealable assessment order was also passed, therefore, a fresh round of complaints was unwarranted. FTO rejected the stance of FBR and stated that it was a case of not fully utilising the information in a matter where duties and taxes were evaded by using various tactics.

FTO further held that the complainant’s contention regarding tax fraud by the company carried weight and therefore, it was in the interest of justice that he should be given another opportunity to present his viewpoint before FBR. Instead of complying with the order, FBR chose to file a representation with the President against the order of the FTO.

The President in his decision observed that FTO’s order was merely a reiteration of FBR’s responsibilities to conduct re-audit proceedings for the recovery of evaded sales tax by efficiently utilizing the information provided by the complainant and granting him another opportunity to explain his viewpoint in this regard.

Published in Dawn, April 13th, 2023

Opinion

Editorial

Increased inflows
Updated 12 Jan, 2025

Increased inflows

Govt must devise a strategy to increase industrial and agricultural productivity to boost exports and reduce reliance on uncertain remittances.
Gwadar’s potential
12 Jan, 2025

Gwadar’s potential

THE Gwadar deep-sea port, completed in 2007, was supposed to be a shining success for the other newly built ports in...
Broken metropolis
12 Jan, 2025

Broken metropolis

KARACHI, Pakistan’s economic juggernaut, is the largest contributor to the nation’s tax revenue. The Federal...
Afghan outreach
Updated 11 Jan, 2025

Afghan outreach

Islamabad should stress stronger counterterrorism measures, yet also engage the Taliban high command in Kandahar as well as politicians in Kabul.
Fragile recovery
11 Jan, 2025

Fragile recovery

STATE Bank Governor Jameel Ahmed appears to be quite optimistic over recent economic gains. That is not unusual;...
Destination Europe
11 Jan, 2025

Destination Europe

THE country’s aviation authorities can rest a little easy. After a four-year banishment from European skies,...