FAISALABAD: The local chapter of Federal Board of Revenue has detected a number of benami accounts being operated in various banks situated at the Clock Tower bazaars and other areas and requested the State Bank of Pakistan to get the accounts verified through biometrics on a priority basis.

Sources said the decision to write the SBP had been taken as the role of banks had also surfaced during investigation into the Shaheer Textile case.

On March 14 last, the FBR registered a case of tax evasion against more than 20 people, including two bank managers. The board had also arrested nine of the suspects on charges of committing a tax fraud of about Rs212 million.

During interrogation, the investigators detected that benami accounts had been opened in the name of Muhammad Waseem, Yasir Maqbool, Muhammad Usman and Babar Ali in the branches of private banks at Montgomery Bazaar, Bawaana Bazaar, Liaquat Town, Abdullahpur, Gulberg Colony, Karkhana Bazaar, People’s Colony and Sooter Mandi.

Such accounts had been used to facilitate the suppliers to show the compliance of section 73 of the Sales Tax Act, 1990.

Board writes to SBP for biometric verification of accounts

Sources said the method of millions of rupees business through the benami accounts is not new in the Clock Tower bazaars which are considered as a trade hub of the district which is known as the textile capital of Pakistan fetching billions of dollars much-needed Forex.

Sharing the modus operandi of the people doing business through benami accounts, they said a majority of them used their tea boys, sweepers, driver and other domestic employees.

A number of times, advertisements also appeared in the media luring the people to earn handsome amount monthly at their homes, they said.

The sources said national identity cards of such persons had been used for the benami accounts and signatures of the account holders were changed through a legal provision in connivance with the bank officials.

In the letter, the FBR said in the similar proceedings by the director of intelligence and investigation (IR) Faisalabad, more than a dozen bank accounts were also found which were used to facilitate the suppliers in showing compliance of section 73 of the Sales Tax Act 1990.

“Most of these accounts used for tax fraud were being maintained with various banks located in the eight bazaars around the Clock Tower and its surroundings,” the letter reads.

The FBR has requested the SBP to issue instructions for necessary biometric verification.

An official, who conducted several investigations into tax frauds, said: “We are to educate the masses how to protect their ID card, cheque book and login password issued by the FBR. These are basic instruments for tax fraud.”

He said the FBR must introduce a mechanism that one entity or individual must not be allowed to get registered second time with the same name.

“Like NTN is unique, similarly the business name must be unique or different so that one could not commit fraud like cheating the bank, FBR and the companies with whom they would do business,” he said.

The official said in the case of Shaheer Textile the NTN of the company was used by the fraudsters although it was not doing business. However, the owner neither blocked the company in the FBR record nor suspended its official account.

Giving some other examples of benami accounts, the official said in a case it had been established that a man Saqib, was not in Pakistan when an account in his name was opened. The suspects had obtained a copy of his identity card and in connivance with the bank officials got opened the account which was used for the tax fraud.

Another man, Khaliq, had started his business, however, he could not succeed to maintain it and faced financial loss. Later on, he used his account for others and made benami transactions.

Naveed Iqbal was a tea boy at the yarn market and four accounts were opened in his name under the disguise that he would get his salary in the account, he said adding number of such accounts had increased in recent investigations and “we would reveal the details soon.”

Published in Dawn, April 17th, 2019