Purported favour to 6 big firms: FBR gives its ex-chairman Zaidi a clean chit

ISLAMABAD: The Federal Board of Revenue (FBR),Thursday, gave a clean chit to the former chairman FBR and top chartered accountant Shabbar Zaidi and rejected allegations of favouring ‘six big companies’ in obtaining refunds of Rs16 billion.

FBR Member Accounting and Audit Mir Badshah Khan Wazir submitted a detailed report on Zaidi before the Public Accounts Committee (PAC), here on Thursday.

The report has acquitted the former chairman from charges of allegedly issuing refunds to his so-called clients including cement companies, a few banks and a fertiliser/ food company. All companies are large corporate entities and tax compliant.

The FBR has also acknowledged that the former FBR chairman has never issued instructions to the field formations for issuance of refunds. “There is no record of such instructions,” the FBR added.

The meeting of the PAC was postponed till Thursday next week due to engagement of FBR Chairman Dr Muhammad Ashfaq Ahmed to an important meeting at the Prime Minister Secretariat.

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According to the presentation of the FBR on Zaidi, the quantum of alleged refunds was Rs16.2 billion during the period of his posting of May 2019 to April 2020. However, the refund actually issued was Rs12 billion in six cases.

The FBR pointed out that the refund is not sanctioned by the FBR chairman but by the commissioners of the competent jurisdiction.

Total refunds issued during the period of May 2019 to April 2020 amounted to Rs71 billion. The refund issued to the six taxpayers totalled at Rs12 billion, which constitute only 17.7 percent of total refunds. The collection from April 2019 to May 2020 stood at Rs1,670,073 million, which is 4.45 percent higher as compared to collection for the corresponding period from April 2018 to May 2019. The report highlighted that the refund was issued during the normal course of proceedings and in most cases there were pending since long but could not be issued due to litigation.

The FBR pointed out that Zaidi had resigned from the membership of the CA firm before assuming the charge of the chairman FBR.

On merits, the companies mentioned in the question are all successful business concerns and under the current design of tax system, it is normal that big corporations end up paying tax more than due, the FBR, in routine, refunds the overpaid tax to all businesses without exception, the FBR said.

The FBR further stated that while he held the position of the chairman FBR, he had already resigned from the membership of the chartered accountant firm of which he was a member.

“The refunds were issued in the bonafide discharge of duties,” the FBR added.

On the conclusion of the meeting, PAC Chairman Rana Tanveer Hussain, MNA told media that the PAC has received a complaint that the former FBR chairman had favoured very big companies in issuing refunds of Rs16 billion in violations of rules and regulations. However, it is yet to decide whether favour was actually given to these companies or not to his client companies, he added.

Copyright Business Recorder, 2022