Cigarette makers: DGI&I for forensic audit of two MNCs

SOHAIL SARFRAZ

ISLAMABAD: Directorate General of Intelligence and Investigation Customs Federal Board of Revenue has recommended forensic audit of the two multinational cigarette companies to thoroughly scrutinize their tax record for detection of evasion, if any.

Sources told Business Recorder here on Saturday that the idea of the forensic audit was discussed during the last meeting of the FBR with cigarette manufacturers at the FBR House. During the meeting, the representatives of the directorate of intelligence customs hinted at forensic audit of the cigarette manufacturers to check tax affairs of major units within the cigarette sector. The cigarette manufacturers of Mardan have repeatedly sent complaints to the FBR that the clearance of the cigarette manufactured by the local units is governed by the supervised clearance system whereas facility of self-clearance is available to two multinational companies.

According to sources, Directorate General of Intelligence and Investigation Inland Revenue has also planned to conduct focused study of multinational cigarette companies and in-depth research of tobacco sector with the help of Pakistan Tobacco Board (PTB). The agency has decided to implement a new plan to tackle the issue at policy level through research, data analysis and sector-specific studies etc.

It covers in-depth research in tobacco sector in collaboration with Pakistan Tobacco Board, industry analysis with bench marking, duty/tax compliance by local manufacturers according to their market share, listing and registration of all the outlets, retailers/dealers/stockists/brokers etc, engaged in the business.

The policy measures like focused study of multinational cigarette manufacturers are part of the overall plan of the Directorate General of Intelligence and Investigation IR’s plan to improve collection from the potential sector.

The outcome of on-going exercise by the directorate of intelligence IR resulted in detection of substantial evasion of duty/tax evasion by local manufacturers; expansion of tobacco’s tax base more closely focusing illicit trade in the provinces of Punjab and Sindh; evolving close liaison with Azad Jammu and Kashmir (AJK) tax authorities and treaty clauses are being invoked (South Korea) to preempt and monitor inflow of smuggled cigarettes.