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FBR unearths ‘biggest tax fraud’

313ghazi

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ISLAMABAD:
The Federal Board of Revenue (FBR) has claimed that it has busted the first biggest tax fraud of billions of rupees by tampering with its electronically integrated Point of Sales (POS) system amid the company owner’s allegations of harassment of family members by the taxmen.

Owners of Metro Shoes – the retail chain of women shoes’ brand – on Friday brought their tax dispute before the Senate Standing Committee on Finance and pleaded for the support of legislators.
The standing committee met for the third consecutive day under the chairmanship of Senator Muhammad Talha Mahmood amid continued absence of Finance Minister Shaukat Tarin.

Leader of the House in the Senate Senator Shahzad Waseem had referred the matter of registration of the case against Metro Shoes.

Initial details revealed during the committee proceedings and disclosed by the taxmen to The Express Tribune suggest that Metro Shoes could be a test case of the government’s ability to go after the wealthy and at the same time the trustworthiness of its POS system.

“On December 9, the FBR raided our business premises and confiscated computers and the record on allegations that we have manipulated the Point of Sales system,” brand owner Nadeem Younus told the committee. “The FBR did not give the company any notice of recovery but now it is demanding Rs500 million and that too without any formal tax demand.”

He said that the tax demand was equal to 72% of the inventory of the company. “After a lapse of one month, neither our computers have been returned nor have we been given the tax demand notice,” said Younus.
“It is a tax fraud case and the FBR will return the system only when the investigation is complete,” said FBR Chairman Dr Mohammad Ashfaq.

Metro Shoes has 45 branches across the country, said Jehanzeb Nadeem, co-owner of the retail chain. In five years, the company has paid Rs477 million in taxes, he added.

While narrating the incident, Younus said that FBR’s people in uniform, similar to the military, raided his residence and harassed the employees.

“They demanded phone numbers of our relatives and inquired about the fiancée of my son,” he claimed.

“Yesterday, I had cracked a joke that the FBR people should start picking children of businessmen but I did not know the FBR was actually doing this,” said Senator Musadiq Malik of the Pakistan Muslim League-Nawaz (PML-N). He questioned how in a civil tax matter, the FBR could enter the private premises.

“The taxmen also inquired about my granddaughter and I wonder what she has to do with my company’s affairs,” questioned Younus.

The FBR chairman did not reply under which law the authority could forcefully enter people’s homes for tax matters. “Despite the legal requirement, the businesses are not integrating with the POS system and there is pressure on us from the government to take action,” said FBR Chairman Dr Mohammad Ashfaq. Businesses that have integrated with the FBR have now found loopholes to avoid the system, he added.

A senior FBR official, who was involved in the case, told The Express Tribune that Metro Shoes’ owners were tampering with QR codes of sales receipts by reprinting the old codes. He claimed that the company was under-declaring its sales by 80% and the FBR got proof of the fraud in the shape of electronic mails exchanged between the owners and the employees.

During the Covid-19 period, the company owners issued instructions to file nil tax returns, when they were actually making sales, said the FBR official. The quantum of tax evasion was being computed but initial estimates suggested that it was around Rs1 billion, excluding the income tax evasion on under-declared sales, said the FBR official. He said that the FBR followed the legal process before starting the search at home and took search warrants from a court judge.

The standing committee asked both the parties to settle the matter amicably and report back to the committee on Monday.

 

firohot4321

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the FBR followed the legal process before starting the search at home and took search warrants from a court judge.

The standing committee asked both the parties to settle the matter amicably and report back to the committee on Monday.

Well if they had search warrant then it's legal entry
 

ziaulislam

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ISLAMABAD:
The Federal Board of Revenue (FBR) has claimed that it has busted the first biggest tax fraud of billions of rupees by tampering with its electronically integrated Point of Sales (POS) system amid the company owner’s allegations of harassment of family members by the taxmen.

Owners of Metro Shoes – the retail chain of women shoes’ brand – on Friday brought their tax dispute before the Senate Standing Committee on Finance and pleaded for the support of legislators.
The standing committee met for the third consecutive day under the chairmanship of Senator Muhammad Talha Mahmood amid continued absence of Finance Minister Shaukat Tarin.

Leader of the House in the Senate Senator Shahzad Waseem had referred the matter of registration of the case against Metro Shoes.

Initial details revealed during the committee proceedings and disclosed by the taxmen to The Express Tribune suggest that Metro Shoes could be a test case of the government’s ability to go after the wealthy and at the same time the trustworthiness of its POS system.

“On December 9, the FBR raided our business premises and confiscated computers and the record on allegations that we have manipulated the Point of Sales system,” brand owner Nadeem Younus told the committee. “The FBR did not give the company any notice of recovery but now it is demanding Rs500 million and that too without any formal tax demand.”

He said that the tax demand was equal to 72% of the inventory of the company. “After a lapse of one month, neither our computers have been returned nor have we been given the tax demand notice,” said Younus.
“It is a tax fraud case and the FBR will return the system only when the investigation is complete,” said FBR Chairman Dr Mohammad Ashfaq.

Metro Shoes has 45 branches across the country, said Jehanzeb Nadeem, co-owner of the retail chain. In five years, the company has paid Rs477 million in taxes, he added.

While narrating the incident, Younus said that FBR’s people in uniform, similar to the military, raided his residence and harassed the employees.

“They demanded phone numbers of our relatives and inquired about the fiancée of my son,” he claimed.

“Yesterday, I had cracked a joke that the FBR people should start picking children of businessmen but I did not know the FBR was actually doing this,” said Senator Musadiq Malik of the Pakistan Muslim League-Nawaz (PML-N). He questioned how in a civil tax matter, the FBR could enter the private premises.

“The taxmen also inquired about my granddaughter and I wonder what she has to do with my company’s affairs,” questioned Younus.

The FBR chairman did not reply under which law the authority could forcefully enter people’s homes for tax matters. “Despite the legal requirement, the businesses are not integrating with the POS system and there is pressure on us from the government to take action,” said FBR Chairman Dr Mohammad Ashfaq. Businesses that have integrated with the FBR have now found loopholes to avoid the system, he added.

A senior FBR official, who was involved in the case, told The Express Tribune that Metro Shoes’ owners were tampering with QR codes of sales receipts by reprinting the old codes. He claimed that the company was under-declaring its sales by 80% and the FBR got proof of the fraud in the shape of electronic mails exchanged between the owners and the employees.

During the Covid-19 period, the company owners issued instructions to file nil tax returns, when they were actually making sales, said the FBR official. The quantum of tax evasion was being computed but initial estimates suggested that it was around Rs1 billion, excluding the income tax evasion on under-declared sales, said the FBR official. He said that the FBR followed the legal process before starting the search at home and took search warrants from a court judge.

The standing committee asked both the parties to settle the matter amicably and report back to the committee on Monday.

Guess the shop owner doesnt pay kick backs or protection money to his local MPA

otherwise its laughable..just walk through muree or any city 99% retailer dont pay taxes

Stop being a joker..that will be my message to FBR

Dont embarasse yourself..
 

ziaulislam

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Anynews about FBR raid is 99% time due to shop keeper being honest ..i.e not paying kickbacks or protection money either to FBR directly or MPA

recently someone shared list of 400 hotels & shops in muree not being registered

If FBR cant register shops in muree & islamabad then whats the point

Is FBR just to collect sales tax that autimatically gets recovered/voluntaey reported


Biggest failure of IK was not dissolving FBR ..
A new CBR is needed

And all people in FBR need to be scrutinized with anyone with wealth beyond means sent to jail

Its pretty easy..just check their dubai shopping trips..shoudnt take more then 24hrs to do so ..

Ptoblem in pakistan is and was relentless corruption not only on top but till very low level
 

akramishaqkhan

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the FBR followed the legal process before starting the search at home and took search warrants from a court judge.

The standing committee asked both the parties to settle the matter amicably and report back to the committee on Monday.

Well if they had search warrant then it's legal entry
The standing committee has no jurisdiction. Perhaps FBR should raid these senators homes. Pakistanis need to start paying taxes. Not paying of taxes hurts honest businesses/men as it creates an unequal playing field. We have had to shutter two separate companies as we could not be price competitive while staying within the tax gambit.
 

I.R.A

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FBR is full of nincompoops. This institution needs serious revamp and organizational changes.

All these FBR babuz have little understanding of modes and methods of modern taxation, on top of it they don't even understand the Tax laws themselves and in most of the cases abuse those laws to harass, overburdening the judiciary and helping the tax practitioners, lawyers and consultants in the process to earn handsome money.
 

ziaulislam

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FBR is full of nincompoops. This institution needs serious revamp and organizational changes.

All these FBR babuz have little understanding of modes and methods of modern taxation, on top of it they don't even understand the Tax laws themselves and in most of the cases abuse those laws to harass, overburdening the judiciary and helping the tax practitioners, lawyers and consultants in the process to earn handsome money.
Nope
Most people in FBR are pretty genious
The issue is NEVER INCOMPETENCE

Its CORRUPTION

They are very good at find tax evasion..what they then do is simply get kick backs

The same is true about everything..be it the police, power distribution companies etc

They know the culprits..they even provide them furthet guidance on how to avoid tax illegally likw under invoicing are all inventions of FBR

Net result
Almost every pwrson in FBR has dubai properties and 5-6 cars depsite having a salary of grade 17(which isnt enough to pay electricity bills)
Most intersting thing in this..isnt corruption..

Corruption happens every country..

The most interesting thing is how the society has normalized corruption/kick backs

It same as doing free hajj on govt money, people will even get free omra or hajj ticket as kick back
This is how much corruption has been normalized
 

Bleek

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Nope
Most people in FBR are pretty genious
The issue is NEVER INCOMPETENCE

Its CORRUPTION

They are very good at find tax evasion..what they then do is simply get kick backs

The same is true about everything..be it the police, power distribution companies etc

They know the culprits..they even provide them furthet guidance on how to avoid tax illegally likw under invoicing are all inventions of FBR

Net result
Almost every pwrson in FBR has dubai properties and 5-6 cars depsite having a salary of grade 17(which isnt enough to pay electricity bills)
Most intersting thing in this..isnt corruption..

Corruption happens every country..

The most interesting thing is how the society has normalized corruption/kick backs

It same as doing free hajj on govt money, people will even get free omra or hajj ticket as kick back
This is how much corruption has been normalized
These haramis should be hanged alive
 

R Wing

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good stuff by FBR this is just scratching the surface a lot be uncovered
the FBR followed the legal process before starting the search at home and took search warrants from a court judge.

The standing committee asked both the parties to settle the matter amicably and report back to the committee on Monday.

Well if they had search warrant then it's legal entry
FBR is full of nincompoops. This institution needs serious revamp and organizational changes.

All these FBR babuz have little understanding of modes and methods of modern taxation, on top of it they don't even understand the Tax laws themselves and in most of the cases abuse those laws to harass, overburdening the judiciary and helping the tax practitioners, lawyers and consultants in the process to earn handsome money.

I agree with everyone.

But --- most importantly --- I do NOT agree with squeezing the 1% of people who pay tax for more and more, especially businesses employing people and generating economic activity WITHOUT FIRST bringing the entire agri (so dear to legislators) and 'trading' sectors under the tax net.

Since the above is politically costly, the government keeps extracting more from the salaried and from businesspeople. One without the other is unfair. First widen the net. Get everyone who can pay into it --- and then increase collection from existing registered taxpayers.

My 2c.
 

ACE OF HEARTS

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If Judicial Audit is conducted of the amount of money demanded in the notices vs the actual recovery done, then trillions of rupees of differences can be found

Thanks to Dealings / Bribery done under the table.

Bags of money are given in the offices of these state institutions to resolve past cases with minimal recovery

Shabbar Zaidi was doing a fantastic job of bringing the powerful faisalabad textile industry into the tax net but the HANDSOME PM COULDN'T BEAR THE PRESSURE OF THE RULING ELITE OF FAISALABAD
 

I.R.A

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But --- most importantly --- I do NOT agree with squeezing the 1% of people who pay tax for more and more, especially businesses employing people and generating economic activity WITHOUT FIRST bringing the entire agri (so dear to legislators) and 'trading' sectors under the tax net.

We need to drop the indirect taxation, come up with simple easy to understand / implement tax laws and blanket tax rates and enforce across the board taxation.

There are more loopholes in tax laws and working of FBR then there are serious efforts to promote and implement transparent just taxation. FBR knows and works on only one harass existing taxpayers issue nonsense notices, raise foolish demand notices and overburden judiciary for nothing.

If we were serious about taxation we would ask why a university student, or a plumber or a rickshaw driver etc should pay income tax when they fall below the annual threshold of taxation. And what happens to that money that gets deducted from them as income tax ..... because it should be legally refunded back to them. e.g. income tax deducted and collected on cell phone bills or top ups.
 

TNT

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Rich ppl dnt pay tax and no one can catch these tax chors. Because they have links in govt and legislators are mostly their friends and partners. Nothing will happen to them as nothing ever happens to the powerful in Pakistan.
 

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