ISLAMABAD: The government has warned non-filers and Chief Financial Officers (CFOs) of wealthy manufacturing units and companies to pay due taxes and refrain from misusing input adjustments as major sources of tax frauds at the cost of the exchequer. The Minister for Finance also warned that all non-filers should worry now because the government will catch the biggest tax evaders.
Minister for Finance Mohammad Aurangzeb said this while addressing a press conference at the FBR headquarters along with FBR Chairman Rashid Mehmood Langrial and IR Policy Member Hamid Ateeq Sarwar on Thursday.
The Finance Minister disclosed that tax evasion of Rs 3400 billion is taking place on sales tax side.
Purchasing property, car: Non-tax filers to face restriction: Aurangzeb
Federal Board of Revenue (FBR) Chairman Rashid Mehmood has categorically conveyed to the chief financial officers (CFOs) of companies not to approve fraudulent sales tax returns to avoid criminal proceedings against them.
“We will initiate criminal proceedings against the CFOs of the companies involved in signing the approval of fraudulent sales tax returns. He said the CFOs have to give affidavits that monthly sales tax returns have been duly approved by them.
Chairman of FBR Rashid Mehmood Langrial sought an apology for past mistakes in the FBR and said that they would clean their house to bring desired improvements in tax to GDP ratio up to over 13 percent.
“Our hands have been tied and there is no other choice but to take action against tax frauds committed in major sectors. We do what we need to do. There will be no more dole-outs from bilateral friendly countries as the existing level of tax to GDP ratio at 9 to 10 percent is simply unsustainable.
There is need jacking up tax to GDP ratio to 13 percent, We don’t have any other choice so tough decisions will be taken. There will be no push back and the government will stand firm for taking actions against biggest tax evaders“ Minister for Finance Mohammad Aurangzeb stated.
Finance Minister and Chairman FBR presented example of five major sectors including textile, cement, beverages, iron and steel as well as beverages, finding out tax evasion standing at Rs 227 billion on annual basis. The fraudulent tax of Rs 227 billion has already been identified and the FBR will initiate recovery proceedings“ FBR’s Chairman made it clear.
Out of Rs 3,400 billion tax evasion identified in Sales Tax, the FBR has found that only 14% of 300,000 manufacturers are registered. Many of the registered entities are also involved in misreporting of turnover, excess input tax claim and use of fake and flying invoices.
The Finance-Minister shared the findings of the study pertaining to Iron & Steel, Cement, Beverages, Batteries and Cement sectors.
Copyright Business Recorder, 2024