FBR directed to recover money paid over fake invoices

ISLAMABAD: President Dr Arif Alvi on Friday directed the Federal Board of Revenue (FBR) to recover the amount paid to fake registered persons (RPs) claiming refunds on the basis of fake/flying invoices.

The direction came from the president while rejecting a representation filed by the FBR against the order of the Federal Tax Ombudsman (FTO) in a case of bogus tax refunds. He further asked the FBR to recover over Rs14 million made to fake RPs during 2012-13.

Dr Alvi upheld the decision of the FTO following a suo motu action against the irregularities committed by FBR field formations in registering, processing, sanctioning and issuing sales tax refunds to fake RPs during the period 2012-13, an official statement issued by the President’s Secretariat said.

President Alvi in his decision wrote that “it was surprising and shocking that FBR failed to investigate fake claims where refund had already been made in full connivance with FBR officials”.

Expressing strong displeasure over the scam, he said, “How can we afford not to recover and criminally charge the fraudsters?” The president stressed recovery of the embezzled money, saying that “instead of resistance by FBR to the suo-moto action by FTO, they should recover the precious money of the people of Pakistan”.

It is worth stating that FBR has filed 74 similar representations with the Office of the President against the orders of FTO. Out of 74 representations, 22 cases have been decided while 52 are still awaiting adjudication.

Furthermore, according to the relevant record, FBR had allowed Rs875.277 million to be paid to fake RPs, of which a payment of Rs223.312m has already been made.

The FTO in its verdict on April 27, 2020 had directed the Chief Commissioner-Inland Revenue and Corporate Regional Tax Office (RTO), Karachi “to investigate and identify the officials involved in registration of fake RPs and initiate disciplinary/criminal action against those found involved and report compliance within 45 days.”.

The FTO in its decision further directed FBR to initiate appropriate action including criminal proceedings leading to recovery of amount swindled from public exchequer through claiming inadmissible input tax and bogus refund.