ISLAMABAD: The Federal Board of Revenue (FBR) has succeeded in winning the first-ever case of conviction for the offence of money laundering based on massive tax evasion.
The Directorate General I&I-IR had received financial intelligence in respect of Habibullah proprietor of Rai Trading Company, Bajaur, KP; wherein, it was disclosed that the quantum of transactions (cash and bank) did not match with the suspect’s business profile.
Initial investigations were conducted by the Directorate Intelligence and Investigation, Inland Revenue Service under the tax laws, which unearthed six other bank accounts with huge transactions.
The total proceeds in all the bank accounts were found to be Rs2.090 billion, whereas the suspect paid only tax of Rs192,877 for the tax year 2015.
The suspect was involved in huge concealment of income, undeclared bank accounts and mis-declaration/inaccurate particulars to hoodwink the tax authorities. A detailed scrutiny also revealed the element of money laundering; therefore, investigations were initiated for the offence of money laundering under the Anti-Money Laundering Act-2010.
With the prior approval of the respective court, the bank accounts were provisionally attached under section 8 of the AMLA 2010. On completion of investigations under Section-9 of AMLA 2010, final challan under AMLA-2010 along with the complaint under Section 203 of the Income Tax Ordinance (ITO), 2001 for the offence of money laundering and tax offence, respectively, were submitted in the court.
The prayers of the department before the court included punishment for both tax evasion and offence of money laundering and forfeiture of the proceeds.
The trial proceedings concluded on November 30, 2021, resulting into conviction of the accused under Section 4 of AMLA 2010; thus, leading to two years of rigorous imprisonment and a fine of Rs500,000.
In addition, the accused was also convicted under Section 192 A of the ITO, 2001 with a simple imprisonment of one year and a fine of Rs100,000. Further, the court forfeited the proceeds of crime, amounting to Rs2.090 billion.
Adviser to the Prime Minister on Finance and Revenue Shaukat Tarin and FBR chairman Dr Muhammad Ashfaq Ahmed have commended the outstanding performance of the Directorate of I&I-IR and congratulated them on this importance success.
This is by all means a great success of the revenue board in its ongoing drive against tax evasion and money laundering and will pave the way for more convictions of various cases under investigation with the department, as well as awaiting the conclusion of trial proceedings in the relevant courts of law.
The FBR is following a policy of zero tolerance against tax evasion and has introduced a number of innovative interventions both at policy and operational levels to ensure a culture of tax compliance in the country.