ISLAMABAD, Aug 2: Tax frauds of more than Rs3 billion committed in financial years 2005 and 2006 have been detected, Minister of State for Finance Omar Ayub Khan informed the National Assembly on Thursday.

This evasion was reported in 76 companies which either evaded the payment of due taxes on their transactions or committed frauds in the shape of getting undue refund or rebate from the tax department.

In a written reply to a question submitted by PPP MNA Mrs Belum Hasnain, the state minister informed the lower house that in some cases action had already been taken against those tax officials who were found guilty.

He said that FIRs had been lodged against the companies involved. He said it had been observed that majority of tax frauds had been committed by the companies dealing in exports, particularly in textile-related products.

The minister quoted some major cases, including those involving M/s Dancom Pakistan which had allegedly committed a tax fraud of Rs140 million, M/s Early Morning Textile (Rs104m), M/s Bilal Traders (Rs203m), Atlas Honda (Rs118m), M/s Fateh Textile (Rs110m), M/s Pak Arab Fertilisers (Rs116m) and M/s Fateh Yarn (Rs76m).

In the rest of cases the amount of tax evasion was less than Rs50 million but more than Rs5 million during the years under review, the minister added.

He also informed the National Assemble that to check leakages in the tax revenue a number of measures had been taken. He said every prescribed person — withholding agent — was legally bound to furnish statement showing complete particulars of the payee, the nature of transaction, amount paid, tax deducted and deposited thereon.

He said to identify leakages in sales tax and federal excise duty, scrutiny of sales tax returns submitted by the registered persons, the detailed audit was conducted by the field formation and directorate of audit department.

The minister said that Rs8.725 million penalties had been imposed on 1,209 income tax defaulters out of total 13,149.

He said that actions were taken in cases of tax evasion/fraud, which included contravention proceedings; prosecution proceedings in cases of tax frauds and departmental proceedings against the negligent or conniving officials.

He further said to minimise the leakage of revenue a number of measures had been taken which included verification of tax payments, input tax adjustments, minimising interaction between the taxpayers and tax collectors, streamlining and simplification of laws and procedures and specialised audit techniques and focused audits based on a national audits strategy.