International NGOs Come Under FBR’s Radar In Multi Million Dollar Tax Evasion Cases

The field formations of the Federal Board of Revenue (FBR) on the intervention of the Federal Tax Ombudsman (FTO) have opened up multi-million dollar tax evasion cases against International Non Government Organizations (INGOs).

According to the details, FTO in terms of section 9(1) of the Federal Tax Ombudsman Ordinance, 2000 (FTO Ordinance) initiated its own motion investigation by on evidence-based information that some of the most meaningful and innovative initiatives of FBR’s own individual officers and field formations stands diluted and washed away due to systemic follow-up failure, ineptitude, and incompetence, frequent posting transfers of officers and massive changes of jurisdictions.

FTO Secretariat through its in-house analysis has also identified that though FBR and its dozens of field formations maintain an organized web portal, rich data centre, exhaustive Data Bases, elaborate and comprehensive operational soft wares and houses a full-fledged & homegrown IT support system such as Pakistan Automation (PVT) LTD (PRAL), yet neither FBR headquarter nor its any single field formation maintains any IT-based tracking system, archiving various valuable initiatives as well as ventures made by different FBR’s organizations, officers, teams or specially created cells from time to time.

Any exhaustive, foolproof and IT-enabled handling over a module (from predecessors to successors) for such initiatives.

Any institutionalized internal follow-up system, or any internal evaluation mechanism to gauge whether the goals envisaged under FBR’s flagship ventures have been logically pursued & achieved.

Therefore in most cases, the good job done is prone to be wasted, diluted or compromised with the transfer of individuals, dissolution of units/ cells and take over by new managers.

While conducting the aforesaid in-house analysis, FTO Secretariat focused on 34 potential cases of tax evasion wherein detailed Investigation Reports with a Case Study were prepared & shared by Directorate General (DG), BTB FBR in December 2018, with the concerned field formations of FBR.

Subsequent action against Resident companies/concerned international contractors for not declaring true particulars of their receipts/ income and not discharging their responsibilities as withholding agents in the light of this initiative could have significantly augmented the national revenue.

However in 2019, FBR management suddenly shelved this whole BTB regime overnight; disbanding BTB Zones Islamabad, Lahore and Karachi. The Office of DG BTB was relegated to a ceremonial entity assigned as an additional charge. Thus in addition to losing an effective organization, the repository of the whole above data/information was suddenly rendered extinct. This kneejerk attitude of FBRs reflects caused a massive loss to the state exchequer.

Taking OM cognizance of this clear maladministration in terms of section 2(3) (ii) of FTO Ordinance, 2000, the FTO office revived the dead proceedings by sharing diluted investigation Reports afresh.

These fresh proceedings conducted by the FTO office have thus far produced quite revealing results such as Income tax demand over Rs. 660 million has been created in six (06) such cases, taken up afresh by FBR’s concerned field formations.

In the majority of cases, earlier information disseminated by DG BTB in 2018 was admittedly wasted, shelved, lying dormant or even lost.

Tax demand created thus far is mainly default u/s 161/205 and normal assessment proceedings based on shared information may result in the creation of equally substantial tax demand.

All the basis triggering the instant OM stand established and due to ineptitude, incompetence of FBR’s functionaries and delay caused in these cases ever since 2018 has resulted in tax proceedings barred by time in a number of cases for a number of Tax Years; another blow to the state coffers.



close
>