The Federal Board of Revenue (FBR) has been directed by the Federal Tax Ombudsman (FTO) to devise an electronic system that will transfer the credentials of bidders participating in an auction of vehicles to the Inland Revenue Department (IRD) for checking their tax returns.
In an Own Motion Investigation, FTO observed that different Customs Collectors and regional officers of the Directorate of Customs Intelligence failed to properly identify persons who participate in the auction of non-duty paid vehicles and did not provide a copy of their credentials. FTO is concerned that handing off vehicles to these individuals is a security risk to the country.
During the initial investigation, Customs Authorities from Quetta confirmed that neither CNIC nor any other particulars were recorded in the bidding files. The FTO also highlighted that CNICs were missing in nine cases and in 23 cases the CNIC number was corrected. It was also reported that 36 non-filers had deposited leviable income tax.
Similarly, the Director of Intelligence and Investigation Customs at Gwadar, told FTO that despite obtaining relevant credentials from successful bidders, the office still did not have the CNIC number of 38 bidders. He said this while maintaining that the vehicles were handed over to the bidders after verification of their CNICs.
FTO also observed in their investigation that non-filers were participating in auctions and were putting up large bids. However, no system is in place to monitor these transactions, therefore, FBR has been asked to develop a mechanism that will electronically transmit the bidder’s data to IRD which will then initiate the necessary proceedings.
The Ombudsman has recommended that if the bidders in these auctions are non-filers, the IRD take necessary legal action to bring them into the tax net. FBR has been given 45 days to comply and submit a report to the FTO.