AIRLINK 74.64 Decreased By ▼ -0.21 (-0.28%)
BOP 5.01 Increased By ▲ 0.03 (0.6%)
CNERGY 4.51 Increased By ▲ 0.02 (0.45%)
DFML 42.44 Increased By ▲ 2.44 (6.1%)
DGKC 87.02 Increased By ▲ 0.67 (0.78%)
FCCL 21.58 Increased By ▲ 0.22 (1.03%)
FFBL 33.54 Decreased By ▼ -0.31 (-0.92%)
FFL 9.66 Decreased By ▼ -0.06 (-0.62%)
GGL 10.43 Decreased By ▼ -0.02 (-0.19%)
HBL 114.29 Increased By ▲ 1.55 (1.37%)
HUBC 139.94 Increased By ▲ 2.50 (1.82%)
HUMNL 12.25 Increased By ▲ 0.83 (7.27%)
KEL 5.21 Decreased By ▼ -0.07 (-1.33%)
KOSM 4.50 Decreased By ▼ -0.13 (-2.81%)
MLCF 38.09 Increased By ▲ 0.29 (0.77%)
OGDC 139.16 Decreased By ▼ -0.34 (-0.24%)
PAEL 25.87 Increased By ▲ 0.26 (1.02%)
PIAA 22.20 Increased By ▲ 1.52 (7.35%)
PIBTL 6.80 No Change ▼ 0.00 (0%)
PPL 123.58 Increased By ▲ 1.38 (1.13%)
PRL 26.81 Increased By ▲ 0.23 (0.87%)
PTC 14.01 Decreased By ▼ -0.04 (-0.28%)
SEARL 58.53 Decreased By ▼ -0.45 (-0.76%)
SNGP 68.01 Decreased By ▼ -0.94 (-1.36%)
SSGC 10.47 Increased By ▲ 0.17 (1.65%)
TELE 8.39 Increased By ▲ 0.01 (0.12%)
TPLP 11.05 Decreased By ▼ -0.01 (-0.09%)
TRG 63.21 Decreased By ▼ -0.98 (-1.53%)
UNITY 26.59 Increased By ▲ 0.04 (0.15%)
WTL 1.42 Decreased By ▼ -0.03 (-2.07%)
BR100 7,941 Increased By 103.5 (1.32%)
BR30 25,648 Increased By 196 (0.77%)
KSE100 75,983 Increased By 868.6 (1.16%)
KSE30 24,445 Increased By 330.8 (1.37%)

ISLAMABAD: Around 30 percent of the total sales tax registered persons (397,000) have obtained sales tax registration to obtain fraudulent sales tax refunds and conduct the business of fake and flying invoices in Pakistan.

A source on strict condition of anonymity told Business Recorder that the total number of sales tax registered persons now stood at 397,000, according to the data of the Federal Board of Revenue (FBR). The data of 397,000 sales taxpayers included dormant taxpayers, active, as well as, inactive taxpayers, but still registered with the sales tax department.

Out of the total sales tax registered persons, nearly 25-30 per cent has obtained sales tax registration to carry out fraudulent sales tax activities.

‘Further sales tax’ and ‘extra sales tax’: conflicting FBR accounts cause a great deal of confusion

The percentage would be on the higher side, but I have given you a conservative figure on the lower side. In the name of facilitation and ease of doing business, the sales tax registrations were liberally issued resulting in fraud of billions, the source added.

A leading sales tax expert strongly rejected the said percentage of 30 percent of fraudulent taxpayers. These are mostly dormant taxpayers. If 30 percent of sales taxpayers are registered for fraudulent activities, this means that 97,000 registered sales taxpayers are bogus and fraud which is not possible. This also means that every third or fourth registered person is fraud, which is also not possible, the sales tax expert added.

According to sources, the estimated sales tax amount evaded through the fraudulent use of flying invoices (irrelevant invoices) would be approximately Rs5-6 trillion. The use of fake/flying invoices to commit sales tax fraud has increased after facilitation, automation and easy ways to get sales tax registrations.

The quantum of sales tax fraud through the “flying invoices” has not decreased after automation. In the name of facilitation, now it is easy to get sales tax registration.

The use of fake invoices has been reduced due to system checks, but the phenomenon of flying invoices has been increased. The estimated amount of sales tax evaded with the help of flying invoices comes to the tune of Rs5-6 trillion, the sources said.

Flying invoices have been used in different cases. There are cases where the input is completely registered but the output is un-registered within the supply chain. On the other hand, there are cases where the output is registered but the input is not registered.

Fake units are registered with the FBR to carryout paper transactions. The fraudsters file fake sales tax returns of dummy firms and claims illegal input tax against bogus invoices. The fake/flying invoices have been used to claim inadmissible refunds/ input tax adjustments, causing massive revenue loss to the national exchequer.

Copyright Business Recorder, 2024

Comments

Comments are closed.

Mustafa Jan 10, 2024 09:30am
Now these people will sit in their homes and talk about corrupt politicians....Sad Part is Every 2nd person is corrupt in Pakistan .... P.S :- only income tax payer should be allowed to vote ...
thumb_up Recommended (0)
Boo Ali Jan 10, 2024 11:12am
share province wise data of such fraudulant sales tax registered persons. I am sure that more than 90% of them would be from the punjab. there is tax culture in punjab.
thumb_up Recommended (0)