The Directorate General, Internal Audit (Inland Revenue) has audited 301 Units of the field formations of the Federal Board of Revenue (FBR) and detected loss of revenue amounting to Rs 28191.082 million during the financial year 2009-2010 out of which Rs 16976.366 million have been retrieved.
This was disclosed in the Annual Report submitted to the Chairman, Federal Board of Revenue by the Director General, Internal Audit (Inland Revenue). According to the FBR sources, the retrieval of loss was Rs 965.140 (M) from Northern Region, Islamabad, Rs 4410.197 (M) from Central Region, Lahore and Rs 11601.029 (M) from Southern Region, Karachi. The Northern Region, Islamabad has jurisdiction over Rawalpindi/ Islamabad, Peshawar and Abbottabad. The Central Region, Lahore holds jurisdiction over Lahore, Gujranwala, Faisalabad and Multan whereas Southern Region, Karachi has the jurisdiction over Karachi, Hyderabad, Sukkur and Quetta.
Additional Tax amounting to Rs 1207.838 (M) has been charged on account of non-deduction of taxes, Rs 478.746 (M) on account of non-payment of advance tax, Rs 58.364 (M) on account of non-payment of admitted tax liability along with the return and Rs 265.204 (M) on account of non-payment of tax levied. All these figures have shown marvellous percentage increase over the immediately preceding year.
The loss of revenue has been retrieved from the defaulters of Withholding Tax provisions at Rs 5910.827 (M). Loss of revenue on accounts of non-charging of Worker's Welfare Fund of Rs 127.321 (M) has also been retrieved. Besides, loss of revenue of million of rupees has also been retrieved on account of miscellaneous irregularities such as wrong calculation of tax, arrears demand not brought forward, wrong claim of carry forwarded losses, wrong/excess refund adjustments, excess credit of tax etc.
Through inspection of a single particular case loss of Rs 4045.597 (M) has been detected and retrieved on account of wrong claim of exemption, excess claim of depletion of (Oil well) allowance and suppression of gain on disposal of fixed assets. Similarly, in the case of another taxpayer loss of revenue of Rs 967.406 (M) has been retrieved on the above mentioned issues. Loss of revenue of Rs 407.925 (M) has also been retrieved in a case where suppression of tax liability on account of applying tax rate of 50% against correct tax rate of 55% as well as non-deduction of withholding tax on account of payments made as profit on debt. Retrieval of loss of Rs 247.164 (M) has been made in a case of a taxpayer who has made un-explained investment of Rs 183.194 (M) in opening stock of raw material and finished goods.
Internal Audit (Expenditure) of the various Divisions/offices has also been conducted and various irregularities/discrepancies were pointed out which have been removed by the concerned authorities. The Annual Report of the Directorate General reflects comparative analysis of loss of revenue detected and retrieved in respect of inspection and audit of corporate as well as non-corporate cases for the year 2009-2010 in comparison with 2008-2009.
The sources described that the Central Region, Lahore and the Southern Region, Karachi have shown land mark progress as their revenue retrieved during the year 2009-10 is 3.5 and 4.62 times respectively higher than the revenue retrieved during Financial Year 2008-2009. The improvement in all areas of work clearly show concerted efforts made by the Directorate General and its sub-ordinate offices to improve the internal controls of the Organization.