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LAHORE: Some 40 percent of the taxpayers registered with the sales tax directorate do not file their forms and defraud both the exchequer and honest taxpayers by indulging in the menace of flying invoices.

Talking to scribe, Special Assistant to Prime Minister on Revenue Dr Waqar Masood said the issue of flying invoices has become a hard nut to crack for the Federal Board of Revenue (FBR). According to him, 250,000 persons are registered with the sales tax directorate out of which 105,000 (40 percent), do not file their forms. He said a crisis-like situation can easily be witnessed so far as the issues of flying invoices are concerned and unscrupulous elements among traders defraud the system over the last many years.

It may be noted that the government has also withdrawn the sales tax zero-rated regime from the five export-oriented sectors from July 01, 2019 and all the industrial sectors are now bound to sales tax @ 17 percent. This high rate of tax tempts unscrupulous traders to defraud both the exchequer and honest taxpayers by indulging in the menace of flying invoices. The FBR has recently busted such gangs of tax evaders and the Directorate General of Intelligence and Investigation (Inland Revenue) has initiated criminal proceedings against the responsible ones.

When pointed out that the field offices of FBR are harassing those genuine taxpayers who had ever procured material from the unscrupulous elements, the SAPM said he was not in favour of any such harassment. He said the associations of concerned sectors have also approached him as well as the commerce minister in near past and action is being taken against those who are harassing the genuine taxpayers.

However, he explained in the same breath that the FBR was very serious on solving the issue of fake invoices and he would go to any extent to sort it out. A number of business associations, particularly, those belonging to export-oriented sectors have approached the government with a request to stop the FBR from harassing the genuine buyers.

Copyright Business Recorder, 2020