The Federal Board of Revenue (FBR) has categorically denied charges of allegedly taking advance of around Rs 50 billion from banks to inflate tax collection figures. It is learnt that the hearing in cases of sales tax refund payments and advances from banks took place at the Federal Tax Ombudsman (FTO) Office. The entire team of tax managers from FBR attended the hearing at the FTO Office here on Thursday.
Tax officials informed the FTO that they have not taken any advances from banks. Tax authorities denied the said charges. Moreover, there is no evidence of taking such advances. They also informed the FTO that the FBR has not taken any loans from the banks as the laws including the Income Tax Ordinance 2001 has no provision which allows FBR to take advances from banks. Even the alleged complaint has not provided any proof of such advances. As far as payment of compensation is concerned, it has been paid in another case of a specific bank which has nothing to do with alleged charges of advances.
During the hearing it has been observed that there is no evidence for such allegation of taking advances. The hearing regarding explanation/comments on the issues raised in response to a complaint No 103/ISD/FBR(01)/1444/2014 has been held on March 12, 2015 at the FTO Office.
It was alleged that the FBR had illegally paid Rs 12 billion as 'compensation' on delayed refunds to four banks for the period 2011 to June 2014, as per audited financial statements of these banks and the alleged 'compensation' was paid to these four banks against around Rs 50 billion advance obtained by the FBR to allegedly inflate the tax collection figures, the FTO office maintained.
In the second case of refund payment, FBR has conveyed to the FTO that payment of sales tax refunds on the basis of queue would ensure transparency in refund payment system. Under the system, the FBR can effectively check fake sales tax invoices. Sales tax refund cheques are being issued against Refund Payment Order (RPO) on 'first come first serve' basis as per dates of RPOs under the new procedure of sales tax refunds payment.
FTO has directed the FBR to improve refund payment system and FTO would regularly monitor the refund payments to ensure admissible payments to genuine claimants, they added. FBR was of the view that transparency has been resorted to in the payment of sales tax refund on explicit instructions by tax authorities. The FBR has also given priority to the sales tax refund claims, warranting immediate processing on account of Court/Federal Tax Ombudsman orders, sources said.
The claims shall be processed on 'first come first serve' basis. For this purpose, the queue will be maintained on the basis of the receipt of the refund claims. However, the claim lacking any document/information will be blocked by the system and next claim in line will be processed with the approval of the refund sanctioning authority. Similarly, claims warranting immediate processing on account of Court/FTO orders will be given priority in the queue with the approval of the refund sanctioning authority, FBR maintained.
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