ISLAMABAD: President Dr Arif Alvi has ordered the Federal Board of Revenue (FBR) to recover Rs 14.421 million in a bogus tax refunds case.
According to a statement, the president on Friday rejected FBR’s representation against the order of the Federal Tax Ombudsman (FTO) in a case of bogus tax refunds worth over Rs14 million made to a fake registered person (RP).
Dr Alvi upheld the FTO’s decision against the irregularities committed by FBR field formations in registering, processing, sanctioning and issuing sales tax refunds to fake RPs during the period 2012-13.
Alvi in his decision said, “It is surprising and shocking that FBR failed to investigate fake claims where refunds have already been made in full connivance with FBR officials.”
Expressing strong displeasure over the scam, he said, “How can we afford not to recover and criminally charge the fraudsters?”
President Dr. Arif Alvi orders FBR to recover Rs 14.421 Million in fake tax refund case and has rejected a representation, filed by Federal Board of Revenue (FBR) against the order of Federal Tax Ombudsman (FTO), in a case of bogus tax refunds made to a fake Registered Person. pic.twitter.com/l5OIYzgC9i
— The President of Pakistan (@PresOfPakistan) January 29, 2021
It is worth mentioning here that FBR has filed 74 similar representations with the office of the president against the orders of the FTO. Out of 74 representations, 22 cases have been decided while 52 are still awaiting adjudication. Furthermore, FBR had allowed Rs875.277 million to be paid to fake RPs, of which a payment of Rs223.312 million has already been made.
On April 27, 2020, the FTO in its verdict had instructed the Chief Commissioner-Inland Revenue and Corporate Regional Tax Office (RTO)-Karachi “to investigate and identify the officials involved in registration of fake RPs and initiate disciplinary and criminal action against those found involved and report compliance within 45 days.”
The FTO instructed FBR to starts proper action including criminal proceedings leading to the recovery of amounts swindled from the public exchequer through claiming inadmissible input tax and bogus refund.
Instead of implementing the directives of FTO, the FBR challenged its jurisdiction and filed a representation with the president, taking the plea that it could not issue such orders and rely on ‘interdepartmental correspondence of FBR’.
