FBR unearths ‘biggest tax fraud’

[R Wing]

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.

I agree.

The entire system is upside down. BTW, are you a Pakistani in Iraq or the other way around? Either way, thanks for a solid post!

 

[Jango]

Why is the Senate standing committee adjudicating a matter between FBR and a company? What is their jurisdiction?

 

[HRK]

Why is the Senate standing committee adjudicating a matter between FBR and a company? What is their jurisdiction?

non actually ...

 

[KaiserX]

PMLN guy says tax evasion is a civil matter what a joke in the western countries and those who follow civil law it is considered a criminal matter that to a high one (Felony)

 

[Pak Nationalist]

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.

FBR unearths ‘biggest tax fraud’ | The Express Tribune

Claims shoe brand tampering with POS system; retail chain alleges harassment

tribune.com.pk

From where can a standing committee of the parliament become a party to a tax fraud investigation targetting a single businessman? I won't be surprised if the owner of the Shoe company is a relative of any sitting member of the committee and this entire drama has been done at the behest of the business by the relative parliamentarian. There should be a proper media trial/coverage of this issue. In this country, even technology and automation are not sufficient as long as deterrence is not established by going after networks of patronage that our society stands on. The thieves and corrupt remain beyond reproach protected by these patronage networks.

Why is the Senate standing committee adjudicating a matter between FBR and a company? What is their jurisdiction?

Precisely my question. Members of the committee must be probed for familial/friendship ties. If there are none, NAB should probe the most vocal members of the committee.

 

[Genghis khan1]

PMLN guy says tax evasion is a civil matter what a joke in the western countries and those who follow civil law it is considered a criminal matter that to a high one (Felony)

Correct, Fcuk with Uncle Sams (feds) money and FBI will fist fcuk you. It’s not even local police matter. It’s a federal crime straight up.

 

[Pakistan Space Agency]

I don't know what the laws are in regards to businesses needing to register in Pakistan but it should be made mandatory for any medium to large scale business to register.

The process should be aggressively imposed country wide with no it's and buts and the registration data should be scrutinised by a number of different Government departments and independent agencies. This is will ensure big businesses don't have just one department to target such as FBR.

Breaking the law should feel intimidating in the country and penalties should be made easier to be handed out with little delay.

I don't understand this "Stay Order" law in Pakistan. Why are people allowed this respite even though it is a well known tactic to abuse the law?

 

[Big_bud]

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.

FBR unearths ‘biggest tax fraud’ | The Express Tribune

Claims shoe brand tampering with POS system; retail chain alleges harassment

tribune.com.pk

This is typical Pakistani rehri wala all the way to top business men. If you ask them how business is going? They will start crying. You will think they have lost all their money. These are the same guys who wont give a 1000, 2000Rs raise to their faithful employee working for them from past 20 years. But next day you will hear they bought a new SUV, bought a new home, or are re-doing complete home decor. Nice...

Tax dept should go after each and everybody!

 

[I.R.A]

I agree.

The entire system is upside down. BTW, are you a Pakistani in Iraq or the other way around? Either way, thanks for a solid post!

Thanks, I am a Pakistani in Iraq.

 

[pak-marine]

Since the above is politically costly, the government keeps extracting more from the salaried and from businesspeople.

you have stated the exact reason and solution is land reforms like everywhere else in the developed even India has it ! now how it can be achieved !? well unfortunately looks like never as there is jagirdar& jurnail alliance

 

[RoadRunner401]

Banana republic, where business is given the option to register or not with FBR . Well known and famous for taking bribes FBR employees are not only not fired or behind bars they are promoted for taking bribes