Detected cases of tax fraud, scams: DG Customs I&I allowed to complete probe, prosecution

The Federal Board of Revenue (FBR) has allowed the Directorate General Customs Intelligence and Investigation (I&I) to complete investigation and prosecution of cases of sales tax, mega tax scams and tax frauds already detected by the agency before July 1, 2011.
Sources told Business Recorder here on Sunday that the decision was taken at a meeting of FBR Chairman Salman Siddiqui with FBR Members including Director General Customs Intelligence and Investigation at the FBR Headquarters on July 30, 2011.
During the meeting, the powers and jurisdiction of DG Customs Intelligence was discussed after creation of a new intelligence agency for Inland Revenue.
It has been decided that the directorate of customs intelligence would continue to investigate and prosecute sales tax cases detected by the directorate before July 1, 2011.
The directorate would have the legal authority to decide all such mega scams detected in the past.
Sources said that the DG I&I- FBR was established in 1957 and since then it works as eyes and ears of the FBR. This organisation has so far successfully handled investigation and prosecution of a number of mega customs and sales tax frauds. On customs side, it has unearthed mega cases like ISAF scam, Missing Container Scam and Bawan Shah Case, whereas on sales tax side it detected two mega scams of sales tax - one at Karachi and one at Lahore wherein 241 dummy/fictitious firms were involved in issuing fake/flying invoices.
The amount of tax fraud at Lahore and Karachi is Rs10 billion and Rs15.1 billion, respectively. Thus the total amount of tax fraud goes up to Rs25 billion. According to sources, more than 6000 taxpayers, who illegally adjusted input tax on the basis of fake/flying invoices have been detected.
The Directorate General lodged FIRs against the fraudsters and many fraudsters have been arrested. The Directorate General has also recovered more than Rs1.40 billion from the tax fraudsters in the shape of cash and post dated cheques.
Sources said that the performance of DG I&I- FBR speaks volumes about its competence as intelligence and investigation agency for FBR. The reason behind success of DG I&I - FBR is that it is mainly manned by officers of Pakistan Customs Service who have long experience of detecting and investigating cases of sales tax and federal excise.
Moreover, the Directorate General is also trying to find nexus, if any, between the tax officials and the business community which results in huge evasion of sales tax in mega scams detected by the Customs Intelligence.