ISLAMABAD: A Public Accounts Committee (PAC) subcommittee discovered severe mismanagement in the Federal Board of Revenue (FBR), resulting in a huge loss of Rs397 billion to the national treasury.
The subcommittee, chaired by Shahida Akhtar Ali, examined audit reports for 2010, 2011, 2013, and 2014. The reports indicated serious issues in the collection of direct taxes and indirect taxes, and customs duty.
Rs6.5 billion of sales tax and Federal Excise Duty (FED) was unrecovered, as per audit officials. The committee also found that 633 people paid less tax or nothing at all, and no recovery was initiated by 10 offices of the FBR. Though the law makes forced recovery of tax permissible, it was not enforced.
The report also mentioned that Pakistan International Airlines (PIA) took Rs2.5 billion as FED from travelers but never provided the amount to FBR. As the PIA is not privatized even now, the loss will be borne by the government now. The committee has requested authorities to verify the amount that can still be retrieved.
Besides, 514 FBR officials also failed to deduct withholding tax during 2013-14, incurring a further loss of Rs24.15 billion. An additional Rs71 million was also earmarked for recovery but not received.
A spokesperson for FBR revealed that Rs16 billion is recovered and confirmed now. An additional Rs452 million is under audit.
