Directorate General of Intelligence and Investigation Inland Revenue (IR), Federal Board of Revenue (FBR), will implement a national enforcement strategy to control the illicit trade of non-duty paid cigarettes and take measures to control tax evasion in cement sector, sugar mills, services sector/professionals, paper/paper board industry and cosmetic sector.
Sources told Business Recorder here on Thursday that the daylong Directors' Conference of the Intelligence and Investigation IR was held at the FBR House. Beside all intelligence directors of I&I IR, the morning session was attended by FBR Chairman Nisar Muhammad Khan. Evening session was attended and addressed by Special Assistant to PM on Revenues Haroon Akhtar Khan. FBR Members and senior intelligence officials from the field formations attended the conference.
It was a first of its kind of conference which focused whole day on different strategies and measures to control evasion in potential sectors. The conference discussed novel ideas/proposals to check tax evasion, revenue leakages, frauds and money laundering under the mandate of the agency and took important decisions. Khawaja Tanveer Ahmad, Director General Intelligence & Investigation (IR) approved a strategy paper to check tax evasion and fiscal frauds. The conference reviewed the overall performance of each Directorate of I&I IR and assigned new targets to the field formations to assist the FBR in achievement of assigned revenue collection target for 2016-17.
Directorate General of Intelligence and Investigation Inland Revenue (IR), Federal Board of Revenue (FBR), will take new measures to control the illicit trade of non-duty paid cigarettes by strengthening the agency's workforce and joint actions by DG I&I IR and customs intelligence.
Sources said that the issue of illicit trade in tobacco sector was discussed during the Directors' Conference of the Intelligence and Investigation IR held at the FBR House. It was noted with concern that the tax evasion in tobacco industry has increased which requires immediate enforcement measures to check movement of non-duty paid/smuggled cigarettes. It has been proposed to establish check posts of the Intelligence and Investigation IR to control movement of non-duty paid cigarettes. This would be instrumental in seizure of non-duty paid items on the spot.
Another proposal is to conduct joint enforcement actions by the DG I&I IR and customs intelligence.
Sources said that joint operations by the DG I&I IR and customs intelligence could also play an important role in checking tax evasion in the tobacco industry. The conference noted with concern that there are reports of tax evasion in sugar sector, cement manufactures, cosmetic industry, services providers including doctors and medical practitioners and high net individuals operating out of the tax net.
The conference also discussed the issue of stay orders granted by the courts, which are hindering actions in big cases of tax frauds and tax evasion. Only in Karachi 58 stay orders have been issued against the agency's enforcement actions of tax evasion and concealments. The agency's high-ups also informed the conference about huge revenue implications involved in major cases where stay orders were issued without hearing directorate general I&I IR side.
The FBR's intelligence arm is confident to complete action against the tax evaders and those committing tax frauds to ensure recovery of the evaded amount to the tune of billions of rupees, they said. The Directorate General of I&I-IR was established under section 230 of the Income Tax Ordinance 2001 and has been conferred upon with powers through respective FBR's SROs vide Nos. 115(1)/201 5, 116(1)/2015 and 117(1)/2015 dated 09.02.2015. Directorate General of I&I-IR is mandated with enforcement of Income Tax Ordinance, 2001, Sales Tax Act, 1990 and FED Act, 2005. The key function of the Directorate General is to act against tax frauds/evasion and create deterrence against such fiscal crimes.
The conference was informed that since inception, the Directorate General I&I-IR has been highly successful in its core functions of enforcement, deterrence and revenue realisation in short span of time. Having faced deterring actions by I&I-IR, the tax evading community has developed a reactive trend of incessant litigation against the department. Success rate of department's actions under respective sections of fiscal statutes and prosecution proceedings has been very encouraging. Consequentially the taxpayers are in a rush to file suits and writ petitions in the courts. The courts have granted stay/restraining orders against the departmental proceedings consequent to legal actions taken under sections 175, 176 and 177 of Income Tax Ordinance, 2001 and section 37B, 38 and 40 of the Sales Tax Act, 1990 and section 23 of FED Act, 2005 in particular.
The agency also decided to intensify efforts to complete investigations of anti-money laundering cases. New cases of money laundering cases are being detected based on suspicious transactions reports received by the agency.
The conference reviewed in detail progress on strategy paper for 2016-2017, performance in High Networth Individual (HNI) cases, progress in finalisation of cases by the field formations, progress regarding litigation cases, progress on STRs-anti money laundering activities, enforcement activities such as raids, FIRs, arrests, etc, and sharing of out of box investigation carried out by each directorate.