ISLAMABAD: The Federal Board of Revenue (FBR) has uncovered a network of tax fraudsters involved in issuing fake sales tax invoices, resulting in a loss of Rs21.69 billion to the national exchequer.

The FBR’s Directorate of Intelligence and Investigation Karachi and Hyderabad filed FIRs against Rehman Enterprises for tax fraud of Rs10 billion and ZA Impex for Rs11.69 billion under the Sales Tax Act 1990.

It was discovered that organised groups were involved in creating fake units/companies and issuing fraudulent sales tax invoices. Subsequently, the Financial Monitoring Unit (FMU) confirmed the scam by issuing detailed Financial Intelligence (FI) reports.

The FMU stated that fake units were established and registered in the names of low-paid employees. According to the FBR report, Gulraiz Ahmed Raza is the main person leading the organised groups.

Fake invoices cause loss of over Rs21bn to national kitty

Ahmed is a former employee of the FBR sales tax department. He was first suspended on corruption charges but was later dismissed from service on Jan 7, 2022. The FBR competent authority likewise turned down his departmental appeal.

An official announcement by the FBR said that to delay the proceedings and influence the inquiry, the accused lodged many complaints against the officers of the Directorate General of I&I-IR on various forums.

Recently, a private complaint was filed in the court of Special Judge Central-I, Lahore, levelling allegations against the DG I&I-IR and other officers, which the Lahore High Court suspended on June 3.

The statement said the FBR and its field formations “are resolute in their mission to apprehend and prosecute the individuals involved in tax-related fraudulent activities”.

It added that by holding the fraudsters accountable, not only will billions of rupees in revenue be safeguarded, but a fair and equitable environment will be fostered for genuine taxpayers.

According to the FBR, the Directorate of I&I-IR Hyderabad lodged an FIR against the sales tax fake invoice mafia. The tax fraud was committed in the supply chain of Rehman Enterprises and 12 other accused persons, including a so-called director of Top End Metal Industries, were nominated in the FIR.

The physical verification of Top End Metal confirmed that the unit is unavailable at its declared address. The records and data of Top End Metal, and other companies allegedly involved in the illegal activity of fake sales tax invoices were retrieved.

In addition, data found in laptops recovered during the search strongly indicate that a large number of paper-based firms involved in fake invoices are actively operating from said premises.

Published in Dawn, June 5th, 2024