DI&I detects financial irregularities: FBR reluctant to initiate audit of AG Sindh office

Federal Board of Revenue (FBR) has, so far, failed to initiate audit exercise against the office of Accountant General (AG), Sindh, although Directorate of Intelligence and Investigation (DI&I)-Inland Revenue, Karachi, has strongly recommended such an exercise, it was learnt here on Wednesday.
Sources said that the DI&I after detecting billions of rupees financial irregularities in the purchase records of different Sindh government departments, had strongly recommended to the FBR to conduct first-ever audit against the office of AG Sindh. They said that the DI&I during examining the purchase records of Sindh government departments and its subordinate offices for tax year 2013-14 has found that 90 per cent of departments did not have Free Tax Number (FTN), although it was mandatory to clear every purchase bill.
Under rule 2(4) of clause-B of Sales Tax Special Procedure of Withholding Rules 2007, it was mandatory upon all departments to obtain FTN and file tax returns on regular basis, the sources said, adding Drawing and Disbursing Officer (DDO) office has to withhold 25 per cent of tax as per rule while rest of the tax has to be paid by the suppliers.
They further pointed out that the rules not only restricted the suppliers to mention the principle amount and tax in separate bills, but also directed AG office not to clear any bill with aggregated amount. However, the purchase bills of the suppliers are being cleared on accumulated amount which, the sources, was not only against the law, but also raised the transparency issues.
Replying to a question, sources said DI&I, Inland Revenue, Karachi, had served notices to various departments and their subordinate offices to get complete details of suppliers. The department would lodge FIRs against the suppliers after getting details from Sindh government department to recover the evaded tax. They alleged various Sindh government departments had made purchases worth billions of rupees for tax year 2013-14, but evaded tax.