LAHORE: A team of the Federal Board of Revenue’s directorate of intelligence and investigation (Inland Revenue) on Friday unearthed a scam of tax evasion in Lahore and arrested three people for being involved allegedly in making and registering fake firms in the name of commoners and using their invoices to facilitate big manufacturers in reducing/adjusting their actual tax.

Since more arrests are expected during the next couple of days, the team has initially estimated the tax evasion amounting to Rs7 billion, Dawn has learnt.

“Some private people - owners of a firm - used to do this illegal activity since long in an office set up in the chamber of a lawyer. And we were monitoring them through the transactions they were making through the FBR’s online system. Finally, we raided their office and seized the goods (laptops, computers, invoices and other material),” a member of the raiding party told Dawn when contacted.

“Since we use to monitor the online system, we thoroughly examine the abnormal transactions. And after having clues, we reach such criminals,” he added.

More arrests expected in coming days

Talking about the way the criminals use to facilitate manufacturers, he said, in fact, companies namely Sabro Trading, Japan Enterprises, Yaqoob Enterprises and Hadi International were registered in the name of commoners. Such firms were not at all in any manufacturing business on ground, but their invoices were being used by major manufacturers/factories in a bid to prove various deals (sale/purchase). “If you make any deal with a registered and operational company, you both will have to pay tax through actual invoices. But in this way (by registering fake companies and dealing with them), you can evade tax easily. Simply, the transactions being made by these people didn’t have trail related to allied/connected transactions,” he said. “And the system, some time, reverses such transactions after a month or so,” the official said adding that the entire transactions were based on fake invoices.

The official said those arrested included Abbas Nawab, owner of the consultancy firm, Farhan, a non-practicing lawyer and Yaqoob, a labourer, on whose name the firm namely Yaqoob Enterprises had been registered. He said Yaqoob, an innocent man, was quite unaware about the company registered in his name and the transactions made using name of the firm. “Some common people whose names were also used to make other companies have fled, fearing arrests,” he said, adding that the raiding party is now after the big guns.

NTDC: A team of the National Transmission and Despatch Company on Friday installed and energised various auto transformers at different grid stations in a bid to meet the increasing load demand of the consumers of Iesco, Fesco and Mepco.

The 450MVA and 500/220MVA auto transformers were installed at 500kV Rawat grid station. Similarly the newly augmented 250MVA auto transformer was installed at the Samundri Road grid station. Similarly the replacement of the damaged 220/132 kV auto transformer with a 160 MVA auto transformer at the Bahawalpur grid station was also made as it will enhance the capacity of these stations, leading to smooth power supply.

“The removal of system constraints is critical for the energy sector’s smooth functioning and NTDC’s comprehensive plan to address this is commendable,” said a spokesman in a statement.

Published in Dawn, June 4th, 2023