ISLAMABAD: The Auditor General of Pakistan (AGP) has unearthed variations of Rs166.055 billion in the figures of tax receipts, and referred to these as ‘evasion’ in the audit report on the accounts of the Federal Board of Revenue (FBR) for 2018-19.
The AGP has recommended to develop a system which detects discrepancies between sets of data declared in sales tax return viz-a-viz data provided in the income tax return and invoke provisions of laws for recovery of duty, taxes and strengthen the internal control.
It was also recommended to introduce online validation checks in the system to stop inadmissible claims of input tax and links its software system with the other departments so that unexplained the investment could be detected.
The report will soon be placed before the Public Accounts Committee, which is led by Rana Tanvir.
The audit report unearthed the non-collection of Rs16.647bn on taxable supplies and services in 199 cases. In addition to this, sales tax was short realised in 77 cases due to a difference of sales tax declared in income tax returns and sales tax returns leading to a loss of Rs5.706bn.
The FBR has also failed to recover the adjudged government revenue of Rs5.286bn in 188 cases. The tax department also allowed adjustment of inadmissible input tax 255 cases without fulfilling legal requirements causing a loss of Rs5.655bn.
The audit department detected short realisation of Rs24.275bn income tax due to concealed income in 144 cases and losses brought forward were incorrectly adjusted in eight cases with a potential tax effect of Rs17.455bn.
The FBR has not assessed in the respective head of income in 134 cases leading to a revenue loss of Rs11.1bn, while super tax short levied to the tune of Rs16.035bn in 123 cases and federal excise duty of Rs1.089bn was not realised in 12 cases.
The report reveals that adjustment of tax credits of Rs8.964bn was allowed incorrectly in 536 cases and another Rs7.162bn minimum tax was not levied in 447 cases. The withholding tax of Rs11.340bn was not treated as final tax in 991 cases and another Rs568.34m withholding tax was not realised in respect of 11 suppliers and contractors.
The revenue amount of Rs3.29bn remained stuck due to non-disposal of confiscated goods in one 1080 cases and another Rs2.563bn value additional tax was not realised in 6,874 cases.
And another amount of Rs896.32m revenue was short-realised due to the misclassification of imported goods in 3,054 cases. The audit report observed grant of inadmissible and irregular exemption of duty and taxes of Rs1.473bn in 2,063 cases.
The report said an amount of Rs750.13m evaded on imported goods for declaration of lower value in 2332 cases, while a cash award of Rs145.8m was irregularly paid in 1668 cases. The special allowance of Rs127.21m was irregularly paid in 223 cases.
Published in Dawn, October 18th, 2020