The Public Accounts Committee (PAC) has expressed displeasure over the failure of the Federal Board of Revenue in recovery of Rs 120 billion revenue from tax evaders.
Pakistan is looking for new loans of Rs 53 billion while no efforts are being made to recover Rs 120 billion from tax defaulters which will help resolve financial problems of the country, said Yasmeen Rehman, chairperson of the Monitoring and Implementation Committee of the PAC which met on Thursday in Parliament House. MNAs Haider Abbas Rizvi and Hamid Yar Hiraj were other two members of the committee who were also present.
The FBR has admitted before the committee that it has failed to recover Rs 120 billion from tax evaders. Parliament can help the FBR in enhancing the disposal of pending cases from higher judiciary so that the recovery of the money could be made, the FBR officials said.
Yasmeen Rehman took serious note of the FBR failure to comply with the directions of the PAC saying that the FBR is not taking the directives seriously. She asked the acting chairman of the FBR Mehmood Alam to ensure full preparation in the PAC meetings and respond to the queries of the committee in a proper manner.
"If you fail in presenting facts before the committee and fixing responsibility, we will hold you and other senior people who will be available responsible," she said. The PAC is not any recovery organisation but wants to streamline the system so that the country will move smoothly, the committee stated, adding that the FBR should evolve an even handed recovery system to gain the confidence of taxpayers and help country to grow economically.
The committee lamented the lethargic approach of the FBR in getting the pending cases in the courts disposed of. The tax authority should hire best lawyers to get Rs 120 billion recovered from tax evaders and discourage the trend of tax evasion, the committee observed.
The acting chairman of the FBR, Mehmood Alam informed the committee that there are two types of cases pending in banking courts, high courts and the Supreme Court, which include appeals and writ petitions. To a question, the FBR chief said that the FBR has a legal cell headed by Member Legal and about 19 lawyers have been included in the legal wing of the tax authority. He said the FBR is paying Rs 10,000 to a lawyer for one case while there are exceptions in which Rs one million fees is also being paid to lawyers.
Mehmood Alam confessed before the committee that there are problems in the enforcement of the FBR laws saying that keeping in view the problems, the Board has set up Inland Revenue Service to streamline the system as well as broaden the tax base.
The committee directed the FBR to provide details of the cases pending in courts regarding the recovery of revenue within a month. Talking about the container issue, the acting FBR chief informed the committee that there are three types of movement of containers in the country - first containers are unloaded at Karachi and transported to other dryports for their formal clearance. Containers are also allowed to be transported to their destinations located in different parts of the country and third are containers of Afghan transit trade for their subsequent movement in to Afghanistan. Containerised cargo for Nato and the US forces also goes to Afghanistan. Some 8000 containers are reaching Pakistan in a month. The number of containers in transshipment is around 1500. He informed the committee that at present Pakistan is providing transit facility to Afghanistan being a landlocked country and similar transit facility for China and Central Asian States is under negotiation.
Explaining the duty structure on import of raw materials in Pakistan, he said that basic raw materials are being imported on import duty of 0 to 5 per cent and semi-processed or processed materials are importable on duty ranging 10 percent to 15 percent on progressive basis.
Taking the audit paras of the Customs Bonded Warehouses the committee expressed its dismay over 22 years lapse in resolving the issue of fire in warehouse, which inflicted a loss of Rs 68 million to the exchequer. Large consignments of non-duty paid over stored bonded goods were burnt in a public bond under the control of Collectorate of Customs Karachi (Appraisement) during a fire accident in 1989, and insurance companies were bound to pay the claims.
The audit authorities informed the committee that an amount of Rs 17 million was recovered from Adamjee Insurance while Rs 50 million was not recovered from Sterling Insurance Company. Had the FBR taken the issue seriously the amount would have been recovered.
The FBR officials informed the committee that liquidation process of the assets of the Sterling Insurance was under way. The committee directed the FBR to present detailed report on the issue in a week. The committee also reviewed the audit paras of the National Accountability Bureau, Federal Investigation Agency and other institutions. The committee after review of the audit paras regarding the evasion and fraud of customs duty directed the FBR chief to write to FIA, NAB and ministry of about provision of the missing record regarding two cases of customs duty fraud worth millions of rupees in Multan.
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