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Biggest tax scam has surfaced in Pakistan's Federal Board of Revenue (FBR) under the Imran Khan government where tax authorities have illegally paid over Pakistani Rs16 billion in sales tax refunds to hundreds of big retailers in the past five months.Being the biggest scam in the FBR during the tenure of the Pakistan Tehreek-e-Insaf (PTI) government, the matter has already been brought to the notice of Finance Minister Shaukat Tarin and the FBR chairman has formed an inquiry committee, according to Express Tribune.According to government sources and a list of beneficiaries of the illegal input tax adjustments, the payments were made between September 2021 and January 2022 in violation of the Sales Tax Act and Sales Tax General Orders (STGOs) issued during the period, as noted by Express Tribune.Tax authorities failed to implement at least four orders that had disallowed 60 per cent input tax adjustments for those large retailers who did not integrate with the tax system through Points of Sale (POS), according to the sources.A grade-20 officer from the FBR's operations wing has been authorized to conduct the inquiry. However, this cannot be considered an independent inquiry as the operations wing along with the policy and POS cell and Pension Reform Adjustment Loan ( PRAL) are responsible for the implementation of the law.The chairman stressed that whosoever was found involved in it would not be spared.Through the Finance Act 2019, the government had decided that those tier-I retailers that would not integrate with the FBR's online system would be penalized by denying them refunds of up to 15 per cent of their claims. This ratio was increased to 60 percent through the Finance Act 2021.To implement the law, the FBR issued various STGOs from August 2021 to December 2021. But the record showed that the FBR did not implement these STGOs and allowed illegal sales tax adjustments for hundreds of retailers.The FBR issued the first STGO in August 2021 and put 6,762 retailers on a five-day notice to either integrate or lose 60 per cent of refunds against the amount claimed, as noted by Express Tribune.The second STGO was issued in September, mentioning 466 names while the third STGO was issued in October having 1,230 names. The fourth STGO was issued in November carrying 605 names.However, except for a few who integrated with the system, the FBR allowed full sales tax adjustments to the rest of the retailers that caused a colossal loss, which was estimated at Rs16 billion at the time of ordering the inquiry. Sources said that the figure further jumped to Rs19 billion.FBR officials said that the STGOs issued since December had now been implemented. But details showed that even on January 18, Rs 2.4 million was paid illegally to a trader.A tier-1 retailer was paid Rs 320 million in illegal refunds - the highest amount. However, one retailer got over Rs 770 million in illegal refunds between September and November in four tranches.Enhancing revenue collection through linking POS with the FBR database was the biggest initiative announced by Finance Minister Shaukat Tarin in the budget, according to Express Tribune.The minister also pitched the POS initiative to the International Monetary Fund (IMF) as the biggest revenue generator in the current fiscal year.Tarin said that he would connect 500,000 POS with the FBR system and collect Rs100 billion worth of taxes from the retailers in two years.At the end of last fiscal year, about 11,000 POS had been registered with the FBR which has now increased to around 15,000.Fingers are also pointed towards the development team of PRAL for its failure to upgrade the system in line with the new legal requirements. PRAL Chief Executive Officer Ahmad Nawaz did not reply to the question as to why FBR's instructions were not implemented, as analyzed by Express Tribune. ( ANI)( With inputs from ANI )Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

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Biggest tax scam has surfaced in Pakistan's Federal Board of Revenue (FBR) under the Imran Khan government where tax authorities have illegally paid over Pakistani Rs16 billion in sales tax refunds to hundreds of big retailers in the past five months ...