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ISLAMABAD: A gang of cybercriminals illegally used the dormant account of a retired armed forces personnel and made fictitious supplies of worth Rs. 1.625 trillion, causing sales tax loss of Rs.292.549 billion and further tax of Rs235.340 billion.

During a press conference held at the FTO office on Wednesday, Almas Jovindah, Advisor Legal & Media Wing, said the cybercrime involving huge loss of govt revenue has been conducted by a gang of cybercriminals facilitated by the employees (present and/or past) of PRAL & FBR who have direct or indirect access to the whole computerized system.

This gang operated in networks, initially spotted and extracted the Sales tax registered dormant persons from the FBR website, and used their password for bogus/fake transactions to benefit end consumers/manufacturers.

President endorses FTO’s order against fake sales tax invoices

In this case, the cyber-criminals with the active support of insiders used the sales tax account of Mrs. Firdous Anwar of Karachi, a 79-year-old living abroad with her children who had been filing “Null” sales tax returns for more than four years without any business transactions. They filed Annexure “C” declaring supplies of re-melting scrap ingots of iron or steel worth Rs. 1.625trillion with the impact of sales tax of Rs.292.549 billion and further tax of Rs.235.340 billion. It was subsequently transferred by the gang to the supply chain, the major portion, ie; Rs. 81.434 billion was supplied to a dormant account of Retired Armed Forces Personnel and later on, the supply chain ended with seven ultimate beneficiaries of taxpayers of Lahore & Faisalabad who were manufacturer of iron &steel.

After conducting the tax fraud, these cyber criminals changed the password and email address so that the original taxpayer cannot access their sales tax accounts.

FTO Advisor Legal & Media Wing said these were paper transactions without physical movement of any goods and without any banking transaction in terms of section 73 of the Act resulting in a huge loss of government revenue. All the beneficiaries knowingly and deliberately purchased fake invoices, without any actual physical movement/transaction of goods and without payment.

The present loose and liberal enforcement regime has emboldened these unscrupulous registered persons to indulge, without the fear of being caught, in the lucrative business of the use of fake/flying invoices.

The edifice of sales tax law is erected on the glorious principle of self-assessment where complete trust is reposed in the taxpayers for submitting true & faithful declarations. To deter misutilization of such trust, the law also has an in-built penal & prosecution mechanism but the “Check” imposed in web portal system in terms of Rule 18(5) of Sales Tax Rules 2006 to prevent tax fraud was disabled/deactivated for this purpose for that particular time.

The credibility of the FBR web portal especially on sales tax, security of the User ID/password, and sanctity of Taxpayers’ data were vandalized with impunity, eg; complainant filed NULL returns without transactions which were replaced with fake supplies in Trillion of Rs.

Secondly, the “Checks” incorporated in the web portal in terms of Rule 18(5) of Sales Tax Rules 2006 were disabled/deactivated to facilitate the transactions.

Thirdly, the particulars of the complainant in the web portal, ie; th mobile number and email address were changed so that the complainant could not take any remedial action

Sultan Ali, Prop of M/s New Metro Footwear Co. expired on 09.02.2017 as per the death certificate issued by Nadra. As a result, he was deregistered but the cybercriminals filed sales tax returns with fake supplies after six years of the death of the taxpayer.

The FTO official added that failure to provide the security and protection of the Complainant’s User ID/password and sanctity of the taxpayers' confidential data from misuse/hacking leading to a tax fraud case on behalf of the complainant causing administrative excesses tantamount to maladministration under section2(3)(i)(a)(b)(c) of FTO Ordinance, FTO official added.

Copyright Business Recorder, 2024

Comments

Comments are closed.

KU Nov 07, 2024 08:07am
Nothing new, similar n daring heists takes place across public sector entities, the real shame is that they always walk away with national wealth, no convictions or jail time.
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Notsurprised Nov 07, 2024 08:21am
1.6 TRILLION and does not get flagged! Meanwhile genuine people get harassed for few lacs claim. FBR and over complicated, high rate taxation is designed to support corrupt and punish avg guy
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Fakhar Nov 07, 2024 09:43am
This must be jewish or American conspiracy
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Anas Farhan Nov 07, 2024 10:44am
There should be strict action against culprits, all the losses to Government Exchequer must be recovered and all the inside criminals must be hanged in front of their respective offices.
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Seem Nov 07, 2024 01:43pm
We are unable to get our genuine gst refund although these guys drawn fake , wonderland of wonderful people .
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Faiz ul Hassan Nov 07, 2024 01:58pm
Poor shop keepers harassed by FBR for tax payments but such big fishes got away with national wealth and revenues.
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Maqbool Nov 07, 2024 02:14pm
Amazed that a red flag did not buzz in FBR when such huge transaction we’re taking place. The guilty will never face any action, and do it again in a few months and get away with it. Only The innocent get Blamed in Pakistan
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Ch K A Nye Nov 07, 2024 04:49pm
Why aren't the beneficiaries being named?
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Jehan zaib Nov 07, 2024 06:55pm
So what action FBR is going to take against these insiders?
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Zohair Nov 07, 2024 07:00pm
STRANGE AND ALARMING name and details of VICTIMS of this insider fraud is shared in article and by the Public Servent. BUT the names and details of INSIDE FRUDSTERS and BENIFICIARIES and withheld.
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ali Nov 07, 2024 07:32pm
nation.already knows FBR higher.staff eats the maaal pani. khan zindabad
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NAVEED Nov 07, 2024 08:28pm
All these criminals are present in all banks, FBR, all state departments they are insiders damaging public and nation from all sides and they are above the law from last seventy plus years.
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Kashif Nov 07, 2024 08:30pm
FBR officials will be made OSD, will retire at 60 and live peacefully in Canada.
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Shahjahan Hanif Nov 08, 2024 07:36am
These things could not be possible without involvement of high and influential officials who join hands with the criminals and approves all tax refunds and get their shares accordingly.
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Raja Hassan Nov 08, 2024 01:51pm
Can somebody explain what happened?
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Arslan Nov 08, 2024 10:44pm
Fbr officers and top management is also involves in such frud without their involvement of higher authorities no one can be able to fraud in any organization ..
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Farook Janjua Nov 08, 2024 11:04pm
Insiders and outsiders got away with truck loads of money, does in the government think they can catch the culprits,- no and never bcz they have connections in high places.
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E Nov 09, 2024 11:49am
summary things hapen when we purchase cig from market. the cig is priced at pkr 484 as per packet and is being sold at pkr 500. where does the difference go?????I am talking about large cig brands
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E Nov 09, 2024 11:51am
@Raja Hassan, using system to override built in safety / checks to route transaction through deceased and dormant accounts
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Make in Pakistan Nov 09, 2024 12:55pm
So a common man gets a notice from FBR for minuscule transactions in his accounts while no one bothered on such huge transfers? I mean how long are we going to tolerate current tax office?
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Arsalan Nov 10, 2024 04:19am
this news only burns our blood. v want to hear tht the people are arrested and the money recovered. but that part will always be missing. just bad news all over with no action in sight. just mourning
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Amir Nov 10, 2024 09:23pm
This is the SOP of our untouchable bureaucracy! Pakistan Zindabad!
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