ISLAMABAD: The Auditor General of Pakistan (AGP) has detected irregularities in sales tax, income tax and federal excise duty worth over Rs124 billion during scrutiny of receipts and expenditures of taxes.
In its audit report for 2013-14 on Federal Board of Revenue’s inland revenue taxes, the report identified 217 taxpayers who were liable to be registered under sales tax, having revenue implication of Rs2.043bn. But it was not done.
This report includes audit observations in respect of compliance with authority, audit of receipts and expenditure relating to Inland Revenue 2012-13 audited between July and December 2013. It also includes audit for fiscal year 2011-12, audited between January and June 2013.
As per law, the authorities should have enforced recovery proceedings without giving show-cause notices. This resulted in non/short-realisation of Rs6.505bn on account of sales tax and federal excise duty. The tax authorities did not take measures for recovery of adjudged government dues resulting in non-recovery of Rs42.549bn in 316 cases during the fiscal year 2012-13.
The matter was reported to the FBR during July to December 2013, but no reply was given by the department, observed the report.
In another case, short realisation of sales tax was made due to inadmissible adjustment of input tax worth Rs5.623bn claimed by 63 registered persons.
Other cases show that non-realisation of sales tax due to non-registration of taxpayers stood at Rs2.043bn, followed by Rs8.32 million blockage of revenue due to non-finalisation of quasi judicial proceedings; Rs2.647bn owing to short or non-realisation of withholding sales tax; Rs238.18m non-realisation of sales tax; Rs115.18m on short realisation of sales tax due to excess adjustment of input tax.
Short or non-realisation of withholding tax stood at Rs26.799bn during the year under review. The non-levy of minimum tax on the income of certain persons caused a loss of Rs4.309bn. Issuance of SROs, conflicting with acts, caused a loss of Rs13.239bn. The report says that the matter was also referred to the Law Division on the recommendation of the Auditor-General office report.
It revealed that Rs7.553bn were paid in excess or unlawful refund of sales tax and special excise duty and there was short levy of Rs2.418bn due to non-allocation of proportionate expenses. There was non-levy of Rs6.651bn tax on unexplained income and assets; short levy of Rs1.094bn due to inadmissible deduction, unjustified expenditure of Rs50.61m on account of payment of performance allowance and Rs22.29m non-recovery of receivable amount from the National Highway Authority (NHA).
Published in Dawn, November 1st, 2014
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