President endorses FTO’s order against fake sales tax invoices

ISLAMABAD: President Asif Ali Zardari has endorsed the Federal Tax Ombudsman’s (FTO) directions against the Federal Board of Revenue (FBR) to constitute a team of sales tax/IT experts to implement an IT based system to eliminate the menace of fake/flying sales tax invoices causing multi billions loss and complete the chain audit till the end.

It is reliably learnt that in a latest order, President Zardari has endorsed the order of the FTO against the multi billions sales tax fraud due to issuance of flying and fake sales tax invoices and constitution of a team of sales tax/IT experts to implement an IT based system to eliminate the tax fraud.

The case has been argued by Lahore based tax lawyer Waheed Shahzad Butt against the gang of fraudsters comprising FBR officers, lawyers, Chartered Accountant and some criminals.

Detection of tax fraud cases: PM directs FBR to expedite efforts

The FTO order stated, “Complaint was filed against FBR, regarding issuance of fake/flying sales tax invoices by misusing complainant’s STRN and other particulars. The neglect, inattention and inefficiency in timely detection of misuse of STRN for a long time and thus allowing evasion of sales tax to enormous quantum and also delay in promptly responding to the request of the complainant tantamount to maladministration in terms of FTO Ordinance.”

The complainant’s STRN was being illegally used for fake and flying invoices. The complainant stated that respondents were practically involved in cheating and deception in issuing fake/flying sales tax invoices and that complainant was seriously aggrieved due to patently illegal, void ab initio, acts of omission against long silence on the part of the FBR for not initiating lawful proceedings against main culprits responsible for misuse of his STRN.

The FTO has recommended the FBR to examine the issue of fake/flying invoices and misuse of STRNs by constituting a team of Sales Tax experts and IT experts and chalk out a viable strategy to be translated into a foolproof IT based system with comprehensive checks and balances, and capable of issuing of red alerts to the tax managers/ administrators with the objective to eliminate the menace of fake/flying invoices.

The FBR to direct the CIR for taking and completing legal actions for recovery of loss of sales tax amounting to 156335 million involved in misuse of fake/flying invoices.

The FBR should also complete action regarding blacklisting of STRNs of all suppliers and buyers involved in fake/flying invoices in the instant case and complete the chain audit till the end. The FBR should initiate appropriate action as provided under the law against the misusers of STRN and involved in tax fraud in the instant case, inclusive of any tax officials as per facts of the case, the FTO added.

Copyright Business Recorder, 2024