ISLAMABAD: The Audi­tor General of Pakistan (AGP) unearthed variations of Rs254 billion in the figures of tax receipts, and referred to these as ‘evasion’ in the special audit reports of eight sectors for the 2017-18.

The AGP has recommended various measures for the recovery of evaded taxes from the sectors along with fixing of responsibility. Those found responsible be proceeded against under the relevant disciplinary rules, the AGP recommended.

The report will soon be placed before the Public Accounts Committee which is led by Mian Shahbaz Sharif.

In a special report on input tax adjustment by independent power producers (IPPs), the audit report observations of over Rs10bn were related to Inland Revenue for 2014-15 and 2015-16. The loss of revenue is due to incorrect claims of exemptions.

The audit observations worth Rs7.3bn were identified in Sales Tax and Federal Excise Duty collection from the petroleum sector. Of these, over Rs4bn was reported for inadmissible adjustment of Sales Tax and Rs2.2bn under the head of non-payment of assessed government dues.

The special report on carry forward and set off business losses including the textile sector identified irregularities worth Rs27.6bn for the year 2016-17. The major irregular claim of losses was Rs26.2bn from the sector during the year under review.

The audit report on builders and developer sectors reported irregularities worth Rs125.2bn for four tax years (between 2013-17). The loss of revenue was reported to the wing for incorrect computation of tax and non-recovery of default surcharge from the sectors.

Irregularities in tax payment from the sugar sector were reported at Rs7.9bn for the year 2013-14 and 2014-15. The loss in revenue was due to non-apportionment of expenses between final and normal tax regime and short realisation of income tax.

In the telecom sector, the special report identified audit observations worth Rs64.4bn in respect of special audit of taxes, withholding taxes deducted, collected and deposited by the various withholding agents including mobile phone companies.

In the case of refunds, the audit report reveals that an amount of Rs2.87bn was paid to taxpayers under the head of refunds. However, the report identified that refund payment was mostly unlawful and inadmissible.

The special audit report on withholding taxes shows audit observations worth Rs8.7bn in respect of special audit of withholding tax of income tax and sales tax by the accounts officers functioning as withholding agents and reporting to field formation of the FBR.

Published in Dawn, December 20th, 2018