FBR detects unique fraud Invalid CPR numbers used to evade tax payments

ISLAMABAD: The Federal Board of Revenue has detected strange kind of tax fraud where some taxpayers have misreported computerised payment receipt (CPR) numbers to dodge the electronic computer system while filing their sales tax returns.

It has been reliably learnt here on Wednesday that taking prompt action on detection of fraud, the FBR has issued instructions (dated Nov 2) to the field formations to take immediate action for recovery of evaded amount of sales tax where taxpayers have deliberately fed invalid CPR numbers in their sales tax return to evade the tax authorities.

Tax experts told Business Recorder here on Wednesday that it is necessary to submit the CPR number to ensure electronic filing of sales tax returns. During electronic cross verification of CPR numbers with bank's data, it has been found that various tax payments did not appear against reported CPR numbers in sales tax returns. This is a strange kind of phenomenon detected by the computerised system of the FBR.

During the investigation and further verification process, it has been revealed that some of the non-verification pertains to genuine data feeding error where any digit of the CPR number was not properly being fed in the system. However, surprisingly some cases have also been caught where taxpayers have deliberately misreported CPR numbers to hoodwink the electronic system and successfully filed their sales tax returns without actual payment of sales tax.

It is important to mention here that if a taxpayer wants to file sales tax return without payment due to some financial constraints the system does not provide any clause for such compliance. Thus, the taxpayer has to feed some CPR number at least to file their sales tax returns.

This defect in the electronic sales tax system has forced some taxpayers to declare some CPR numbers to ensure timely filing of return to avoid penalty etc, tax expert added.

On the issue of invalid CPR numbers, the FBR has also issued instructions to the Chief Commissioners of Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs) here on Wednesday. According to the FBR's instructions, the field formations should immediately pursue cases of invalid CPR numbers to recover the evaded amount of tax, the FBR added.