KARACHI: Federal Board of Revenue Chairman Tariq Bajwa has directed officers of Inland Revenue Services (IRS) to make sure that the recovery of refunds released against fake invoices, official sources said.
The directives have been issued at a meeting of chief commissioners of tax offices, which was chaired by Tariq Bajwa at Karachi.
The recovery of refunds released on fake invoices was stuck for the last two years as billions of rupees were given to the companies, which obtained sales tax registrations only for taking refunds.
Sources said that the three regional tax offices (RTOs) in Karachi had either blacklisted or de-registered those companies that were involved in such illegal practices but the tax offices had done nothing to recover the issued amount.
In June 2013, the RTO-II submitted a report about the tax fraud to the tune of Rs128 billion – both sales tax and income tax- to FBR. Since then, the senior tax officers have not taken any measure to recover the amount. Recently, RTO-II unearthed another scam of nine billion rupees. However, no measure has been taken so far to recover the amount. The companies involved in the scam were only de-registered or blacklisted and the individuals responsible were not traceable.
The chairman at the meeting seemed bothered over the slow progress of the recovery and directed the officials to ensure the recovery at any cost. Notably, FBR was in serious need of recovery since it is much behind the revenue collection target of Rs 2,475 billion for the fiscal 2013-14 as it collected only Rs 1,031 billion in July–December 2013.
Sources said that the chairman instructed the chief commissioners to deal the taxpayers with fairness to build their trust on FBR. Bajwa also issued directives for the disposal of the genuine refunds that were stuck for months and due to which business community was facing liquidity issues.
A day ago, Saeed Shafiq, former president of KCCI, at a meeting with the federal finance minister Ishaq Dar, complained that the chief commissioner RTO had not treated him with fairness while the lower staffs were demanding bribe money for clearing refund claim process, which was stuck for the last 30 months.
The finance minister referred the case to FBR chairman. The issue was resolved with the directives that any of the officials found in illegal practices would face disciplinary action. The tax officers have been directed to complete audit exercise on priority basis and ensure current and arrears demand.