ISLAMABAD: The Auditor General of Pakistan (AGP) raised serious concern over the Federal Board of Revenue’s practice to borrow money from multinational companies at the end of the financial year to show that it met the budgetary revenue collection target, which had a negative impact on the distribution of resources under the NFC Award.

A sub-committee of the Public Accounts Committee (PAC) meeting held here on Wednesday examined Audit Report for the years, 2010-11 to 2017-18 of the Revenue Division (FBR) under Convener Sherry Rehman. While examining a particular case of refund of Rs16.9 billion to five companies (MCB Bank Ltd, M/s Government holding (Pvt) Ltd, M/s Pakistan Telecom-munication Authority and the OGDCL) in 2011, the audit official stated that the FBR paid refund in three cases although there was no refund claim. In addition, refund was paid in two cases in excess of the refund assessed as shown in the assessment orders passed under section 120 of the Income Tax Ordinance, 2001.

The FBR chairman admitted that in the past, the board borrowed money and put in the revenue collection to show budgetary target was met; however, he assured the committee that two years ago this practice was discontinued.

He further said such decisions were taken at the prime minister and the finance minister-level.

AGP identifies departments resisting audits

Audit official alleged that the FBR borrowed money in June at the end of the financial year from big companies and showed as tax collection, which had a negative impact on resource distribution of provinces under the NFC Award.

In July, he said the money was returned under refund head.

Earlier, on Tuesday, the committee had expressed its displeasure over nonappearance of the chairman FBR in the meeting and suspended the proceeding.

Copyright Business Recorder, 2022