NAB issues guidelines to FBR: huge ST evasion detected on supplies to government departments

The National Accountability Bureau has issued guidelines to the Federal Board of Revenue to check massive sales tax evasion on supply of goods to the government departments, causing revenue loss to the kitty. Sources told Business Recorder here on Tuesday that the FBR has taken serious notice of the NAB letter and issued instructions to the field formations to immediately check sales tax evasion as reported by the bureau.
The NAB has raised legal and technical issues pertaining to in sales tax evasion by suppliers to the government departments. According to the NAB communication to FBR, in pursuance of Prevention Regime Initiative under purview of the National Accountability Ordinance (NAO) 1999, it has been learnt that firms supplying goods to government departments avoid paying sales tax, which results in loss to government exchequer. In order to ensure efficient and effective sales tax collection, NAB has made suggestions to the FBR for consideration to avert corrupt practices:
Firstly, all government departments should process the bills after withholding of sales tax as envisaged in withholding rules issued by the FBR. Secondly, in case of supply of goods, Accountant General of Pakistan Revenue (AGPR) should issue cheques to only those suppliers who are registered with the tax department and the tax was properly withheld by the department on supplies made by them.
Thirdly, it must be ensured by the concerned Regional Tax Offices that government departments including AGPR are following the tax laws properly and supplies to the government department are discharging their sales tax liability as per law. Fourthly, Government Departments should follow Rule-12 of Public Procurement Regulatory Authority (PPRA) for purpose of advertisement.
Fifthly, the copies of monthly sales tax returns must be attested by a Principal Accounting Officer or head of the department. The NAB has issued the letter to the FBR with the approval of Director General (A&P), President Prevention on Procurements/Auctions/Projects constituted under Section 33C of NAO 1999 by Chairman, National Accountability Bureau.