KARACHI: The Directorate of Internal Audit (Southern Region) has uncovered a major sales tax fraud involving Rs 11.3 billion.

According to an FIR, the case centres around two companies accused of engaging in fake transactions and generating fraudulent sales tax inputs, resulting in approximately Rs 11.3 billion or about USD 40 million in sales tax evasion.

The investigation revealed that no company had legitimate business operations at their registered addresses. However, one of the companies, purportedly run by a pensioner receiving less than Rs10,000 monthly, showed a staggering turnover of over Rs 66 billion, alleging that this was achieved through a complex web of fake transactions and fraudulent tax credits.

The scheme allegedly involved multiple layers, with at least 47 other companies and individuals identified as potential beneficiaries of this tax fraud. Many of these entities have already been blacklisted by tax authorities for suspicious activities.

The Directorate continues its investigation, which began in August 2024 following abnormalities detected in one of the accused companies’ tax profiles.

During the investigation, 58 names of firms/persons have been surfaced which the Directorate added to the FIR. These firms/persons are the direct beneficiaries of this tax fraud in the 1st layer. Investigations are under way to dig out more facts behind this heinous crime.

Copyright Business Recorder, 2024