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Published 13 Feb, 2023 07:13am

FTO orders probe into alleged tax fraud

ISLAMABAD: The Federal Tax Ombudsman (FTO) has issued an order in favour of poor farmers of Sindh and directed the Federal Board of Revenue (FBR) to investigate alleged tax fraud committed by a tractor maker.

The order issued by the FTO noted that Millat Tractors had made improper sales tax refund claims of Rs14.8 billion during 2017-22. Camouflaging transactions, engineered purchases were attributed to fake buyers who were not growers and farmers. The case related to a complaint by Sindh Chamber of Agriculture, Hyderabad, said the FTO.

The complainant alleged that the tractor maker claimed fake refunds in the name of sales to growers of Sindh and submitted sales tax refunds to the FBR against these transactions.

The FTO’s order added that bookings of tractors were made by investors but these buyers were not shown as growers and farmers.

These investors were only carrying on the purchase and sale of tractors for profit/commission and concealed tax.

The FTO said persons who had purchased tractors without agricultural landholding mostly used them for purposes other than agriculture such as industry, transporting bricks and construction material, digging land and cleaning of garbage.

According to the findings of the FTO, the core issue was allegation of tax fraud by submitting sales tax refund of Rs14.8 billion to FBR from July 2017 to June 2022.

“The allegation of tax fraud requires detailed examination,” it added.

The FTO recommended to the FBR to direct the chief commissioner Inland Revenue (IR), Large Tax Office (LTO), Lahore to conduct an inquiry against the company.

Published in Dawn, February 13th, 2023

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