'Red Alerts' successful if system is able to control fraudulent payments: FTO

Federal Tax Ombudsman (FTO) Dr Muhammad Shoaib Suddle on Thursday said that the system of issuing "Red Alerts" by the Federal Board of Revenue (FBR) to check bogus sales tax refunds and input tax adjustments is successful in case system is able to control fraudulent payments.
He was responding to a query during a press conference at the FTO Office on the issuance of the "Red Alerts" by the Directorate General of Intelligence and Investigation Inland Revenue (IR). If the "Red Alert" system is practically checking the bogus sales tax refunds and input tax adjustments, then we can term the system is working properly. This depends on the accuracy of the system to timely check such refunds before their issuance.
When asked about status of investigation against sales tax refund frauds, Dr Suddle said that the FTO Office is probing such type of big systemic issues of the FBR. He said that it is the top priority of the FTO Office to ensure timely implementation of the decisions of this office. Referring to an important case of the FTO on glaring anomalies in income tax slabs (4, 5 and 6) for computing income tax for salaried persons through Finance Act 2012 he said that November 15 is the last date for compliance by the FBR. If the decision has not been timely implemented by FBR, the Board has the option to go to the President or file review petition with the FTO Office. If the FBR did not file review petition or go to the President, the FTO Office can initiate contempt proceedings against concerned tax officials including compensation to the taxpayers. Talking about the FBR's Tax Registration Enforcement Initiative, 2012, Dr Suddle said that the government is rightly doing to bring over 3 million un-registered persons into the tax net. Let us see the progress on the FBR's registration scheme.
He further said that if the FBR has estimated to collect Rs 96 billion from the amnesty scheme, the amount is 'peanut' in view of large scale un-documented economy. Ideally, these tax evaders should be sent to prison. "There are couple of things which we are not sure how much time it will take. There is some information with different countries and we have no idea when will to access to that.
Let's say, if we can access to the information by the end of current month, we will finalise the inquiry by December 6. In case the foreign information is not available, even then the work cannot be left incomplete," Dr Suddle said. "I will remain FTO till June 2013. By June there would be a new government and hopefully elections would be held on time," he added.