Tag: FBR

Islamabad has halted the purchase of approximately 1,100 cars which the Federal Board of Revenue (FBR) wanted for its employees. The purchase order has been suspended until claims into corruption at the federal level can be investigated thoroughly.

Senator Saleem Mandviwala chaired the meeting of the Senate’s Standing Committee on Finance and Revenue to look into allegations raised against government officials.

The agenda of the meeting revolved around dissecting the scandalous purchase order made by the FBR and its subsequent approval. As per reports, the initial purchase order was made for only 1010 cars after which officials tacked on an additional 70 cars to the order to boost the total number of cars to 1080.

Senator Faisal Vawda had received threats as he brought the suspicious matter to light. Furthermore, reports revealed that raids against a rival car manufacturer had occurred around the time of the purchase order. These matters warrant a probe and investigations are underway.

Faisal Vawda who had initially ‘blown the whistle’ surrounding the purchase process made additional allegations. He revealed that FBR officers had issued him death threats and he substantiated his claims naming multiple senior officers.

The Senate Secretariate released the names of the three officers whom Faisal Vawda had named. The officers were identified as Ali Saleh Hayat, Shahid Soomro and Hayat Siddiqui – and were indeed working for the FBR.

In light of the allegations, FBR Chairman Rashid Mehmood Langrial said that the purchase order would be suspended immediately. In addition to the suspension, reports reveal that he also pledged to conduct an extensive investigation into every single allegation made in the senate meeting.

He requested that the Federal Investigation Agency (FIA) should look into Faisal Vawda’s allegations regarding threats made on his life. The senator has remained extremely vocal throughout the process. According to Vawda, FBR officials even raided Toyota Indus’ offices once he made allegations against the revenue watchdog.

Langrial suggested that in addition to the FBR’s internal review, the Senate Panel could order an ‘external agency’ to look into the matter as well. Given Faisal Vawda’s position on the matter, it is likely that an external investigation will be launched soon.

Langrial also highlighted the need for the automobiles by suggesting that tax officials could not ensure compliance with taxation laws without physically visiting business premises. He cited the existence of a “cash economy” as the reason behind the compliance issue.

The FBR’s revenue shortfall for the first half of fiscal year (FY) 2024-25 surged to 384 billion rupees. The revenue target was set at approximately six trillion rupees however, the FBR was only able to collect 5.624 billion rupees as per reports.

A Parliamentary panel has asked Prime Minister Shehbaz Sharif and Finance Minister Muhammad Aurangzeb to immediately halt the purchase of cars for the Federal Board of Revenue (FBR). The panel has criticised the purchase as ‘scandalous’ because the FBR is to be rewarded despite being responsible for a revenue shortfall of approximately 384 billion rupees in Fiscal Year (FY) 25.

The purchase aims to acquire over one thousand motorcars for FBR officers to improve their operational efficiency. The request for the purchase of 1,010 cars was made by FBR chairman Rashid Mehmood Langrial and was approved by Shehbaz Sharif.

In a meeting presided over by Saleem Mandviwalla of the Pakistan People’s Party (PPP), the Senate’s Standing Committee on Finance implored both Shehbaz Sharif and Muhammad Aurangzeb to reverse the purchase orders which the FBR had made. Reports reveal that the tax watchdog had given the order to a single car assembler without including any other manufacturers via a bidding process.

Critics have pointed out that the purchase agreement seems suspicious, while the Standing Committee has said that Islamabad should stop so that the federal government can be spared from further ‘embarrassment’.

The issue was initially brought to light by Senator Faisal Vawda, who lambasted the purchase order as the FBR had displayed poor performance in its duties. According to reports, Vawda said that the purchase of cars, which will cost the national exchequer a staggering six billion rupees, could only be justified if the FBR could recoup at least half of the tax shortfall of 384 billion rupees.

He said that FBR officials only deserve the cars if they can cut down on the revenue shortfall and should be penalised instead of rewarded if they fail to do so. The senator even went so far as to call the whole purchase agreement ‘a scam’ as only Honda Atlas had been considered.

He pointed out how the purchase order and approval from the Economic Coordination Committee (ECC) were issued on the same day. According to Faisal Vawda, this indicates the possibility that no other car assembler had even been considered, let alone been given the opportunity to bid for the contract.

Senator Vawda lamented the purchase, saying that the “doors to corruption have been opened”. This comment was passed as he explained how Toyota Indus had been offering a lower rate with greater features to the government, such as greater fuel efficiency along with a longer after-sale warranty.

According to reports, the FBR decided to purchase from Honda as they were only allowed to purchase vehicles up to 1300cc, while Toyota’s cars were 1328cc. He also remarked how the FBR had not even considered other car assemblers, such as Nissan and Hyundai.

Prime Minister (PM) Shehbaz Sharif directed the Federal Board of Revenue (FBR) on Thursday to identify ‘weak cases’ to expedite the resolution of pending revenue-related cases and to appoint qualified experts to a panel for identification.

The PM issued this instruction to both the FBR and Law Division officials in a meeting to resolve legal cases that have been pending for extended periods. Analysts predict that this directive will be beneficial as the authorities will finally oversee longstanding cases.

According to reports, over 33,000 cases currently remain unsolved, with a financial value of approximately 4.7 trillion rupees. These pending cases are not to be considered by a singular executive body but rather fall under the jurisdiction of various courts and tribunals.

Shehbaz Sharif’s directives allow for the FBR panel to recommend an immediate withdrawal of weak cases once the panel has reviewed them.

The creation of the panel may result in business owners facing higher taxes in the future, as the department can suggest “high-potential cases” where taxes can be raised.

FBR’s officials have adopted three main decisions to handle the pending cases as per reports. Digital guidelines are to be utilised to assess officers and cater to them so that they can make efficient decisions.

However, analysts have highlighted how this panel should be free from corruption, as officials could unfairly withdraw cases. The concerns are genuine, as any cases unfairly dismissed will significantly hurt the national exchequer, which the cash-strapped nation cannot afford.

However, the meeting also outlined important procedures for vetting competent and impartial officers before adding them to the panel. It was reported that the original assessing officers would defend their cases at tribunals instead of the panel members.

To further curb the possibility of officials corrupting the process, authorities present in the meeting decided that four to five individuals with good reputations would be appointed to defend their cases at the tribunals. The appointment of these individuals will require them to clear a set of ‘competitive examinations’.

Shehbaz Sharif also highlighted that officers who perform their duties with diligence and honesty will be rewarded, while dishonest practices will result in severe consequences.

Analysts are speculative about the economic gains which could be realised if the FBR were to receive the outstanding value of 4.7 trillion rupees. If the FBR can extract this amount from the pending cases, it would be enough to finance approximately 25 percent of the federal budget for the Fiscal Year (FY) 2024-25.

Despite repeated warnings from the tax authority that the deadline for the submission of tax returns will not be extended, latest reports suggest that the Federal Board of Revenue (FBR) may be forced to extend the deadline for some filers due to an issue in the IRIS system.

IRIS is an online portal from the FBR used by taxpayers to submit returns.

Recently, the business community has also complained that they are facing issues with the IRIS website and demanded the deadline should be pushed further, however, the FBR ruled out the possibility’ and stated that the last date for filing tax returns will not be extended.

According to sources within the FBR, the last date for filing returns is now expected to be extended by two weeks for individuals, associations of persons, businessmen, and companies.

Those who are facing issues may be able to get an extension owing to their specific reasons, however, the official deadline will not be pushed beyond September 30 for the entire country.

This means the two weeks’ extension, if announced, may not be for everyone.

The tax authority is considering extending the deadline after the business community, during their meeting with the army chief, suggested that the FBR should create convenience for businessmen rather than difficulties.

Earlier, filers and business owners demanded that the last date for filing annual tax returns be extended to at least October 15 so that maximum tax returns could be filed and difficulties faced by taxpayers could be eased.

Finance Minister Muhammad Aurangzeb has confirmed that the government is preparing to eliminate the category of non-filers, aiming to reduce the burden on those who actively file taxes.

“It’s time to remove the non-filers category,” he stated in an interview with Voice of America during his visit to New York, USA.

“Pakistan is probably the only country in the world with this concept. Either you are a filer, or you’re simply not paying taxes,” Aurangzeb explained. “The government is set to abolish this category.”

He further added, “The government cannot afford this anymore.”

This announcement follows remarks by Federal Board of Revenue (FBR) Chairman Rashid Mahmood, who said that the government had decided to do away with the non-filers category.

For the 2023 tax year, 6 million returns have already been filed, and the government expects more following strict measures introduced against non-filers.

The Federal Board of Revenue (FBR) is considering slapping heavy fines on major retailers who are dodging the tax system by issuing “non-certified receipts” to customers.

The tax authority is reportedly planning to fine Tier-1 retailers who are not reporting sales tax correctly to the FBR.

According to details, the FBR will impose a heavy fine of Rs500,000 per incorrect receipt on the retailer. On the other hand, the FBR will reward consumers who report a non-certified electronic receipt, which does not meet FBR standards, to the tax authority.

Earlier, the FBR had advised electronic integration of points of sales (POSs) of all Tier-1 retailers of textile and leather sectors to ensure correct reporting of sales by retailers and realisation of overall due tax.

Retailers must install software provided by the FBR, which reports sales tax to the tax authorities instantly.

The installation of this software is crucial, as this is how the FBR gets to know about the number of sales made by a retailer, the tax paid, and what they charge the consumer.

Interestingly, a POS invoicing prize scheme was first introduced in 2022 to promote tax compliance and documentation of the economy. The scheme involved conducting monthly ballots and distributing cash prizes among winners.

Read more: Petrol, diesel prices likely to be reduced by more than Rs10 per litre for next fortnight

The Federal Board of Revenue (FBR) has issued a notice to traders in Karachi, instructing them to pay an advance tax of up to Rs60,000 per month under the Tajir Dost Scheme.

The notice, issued by the regional tax office in Karachi, specifies that the payment is due by the 15th of each month.

The Tajir Dost Scheme, designed to simplify tax compliance for traders, has sparked concern among the business community, particularly in key markets such as Liaquatabad and the electronics market.

Traders have expressed frustration over what they see as an additional financial burden imposed by the authorities.

In response to the scheme, Karachi’s business community has decided not to comply with the advance tax payment. On Friday, traders announced a nationwide strike scheduled for August 28 to protest against the Tajir Dost Scheme.

During a joint press conference, the All Pakistan Anjuman-e-Tajiran, along with other traders’ associations, demanded the immediate withdrawal of the scheme, labelling it as ‘unacceptable.’

They also called for the reversal of the decision to impose heavy taxes on the export sector, as well as the withdrawal of the recent increase in income tax slabs for salaried individuals and business owners.