MUZAFFARABAD: With three months of the current fiscal year still at hand, the Azad Jammu and Kashmir (AJK) Inland Revenue Department (IRD) has generated more than Rs40 billion in direct and indirect taxes against its target of Rs36.5 billion for 2022-23, senior officials said on Thursday.

Speaking at a joint press conference, AJK Central Board of Revenue (CBR) chairman Raja Amjad Pervaiz Ali Khan and senior IRD-AJK officials Sardar Zafar Mahmud, Ishtiaq Ahmed and Basil Siddique said they were hopeful of raising another Rs10 billion by the close of the fiscal year 2022-23 on June 30.

“But surpassing targets becomes possible only when the department enjoys the trust of the citizens, particularly the taxpayers,” said Mr Khan.

He said the purpose of the presser was to reject an “agenda-driven malicious campaign targeting the CBR and IRD on social and a section of traditional media” on the one hand and place actual facts and figures before the newsmen on the other.

The AJK IRD, previously known as AJK income tax and excise department, was under the administrative control of the AJK Council, headed by the prime minister of Pakistan, until the enactment of the 13th constitutional amendment by the Raja Farooq Haider led PML-N government in June 2018.

The CBR chairman recalled that when the AJK government got the administrative control of the IRD, the total annual revenue receipts were not more than Rs11 billion.

“Ever since, the department has always raised revenues beyond the stipulated target in what speaks volumes about the vindication of the June 2018 decision,” he said. Mr Khan also expressed regrets at “unconfirmed reports” about the issuance of income tax refunds by the AJK IRD.

He maintained that the issuance of refund was banned after 2018 until April last year.

“Even after the lifting of the ban, not a single firm or company has been issued a refund. Contrarily, some individuals, mostly the retired employees of the AJK education department, did get refunds to the tune of Rs2.5 million,” he said.

“The claimants of refunds have to go through a cumbersome process because public money cannot be released without fulfilling strict procedural formalities,” he added.

Intervening, IR commissioner Ahmed recalled that between 2010 and 2018, when the AJK Council wielded control over the department, refunds amounting to more than Rs4 billion had been issued under the “highly questionable decisions.”

In September 2013, Mr Ahmed had submitted a detailed report to the then federal secretary for Kashmir affairs, highlighting gross irregularities in the issuance of tax refunds, worth billions of rupees, to foreign companies engaged by Wapda for Mangla raising and Neelum-Jhelum hydropower projects.

However, the whistle-blowing on his part had not gone well with the Council, as it led to a series of vindictive actions against him.

Referring to those refunds, the CBR chairman said: “We have serious reservations against those decisions and an inquiry is being held into the contentious practice.”

On allegations about embezzlement in duties from the AJK based cigarette factories, he claimed that the department had declared as many as 17 toll plazas as excise check posts and was soon going to install a track and trace system to plug leakages. He informed that previously the IRD had separate commissioners for direct and indirect taxes for the entire territory.

“However, now we have commissioners for South and North to look after both the direct and indirect taxes in their respective jurisdiction,” he said.

Published in Dawn, March 31st, 2023