President Dr Arif Alvi disposed of on Sunday 42 representations of the Federal Board of Revenue (FBR) pertaining to the cases of bogus sales tax invoices, worth over Rs1.2 billion.
The FBR had filed the representations with the president, contesting the orders of the Federal Tax Ombudsman (FTO) passed in the suo moto cases, in which bogus sales tax refunds were reimbursed fully or partially to fake claimants by FBR officials.
The scam was unearthed by FBR’s Directorate General Intelligence & Investigation-Inland Revenue, and ‘red alerts’ were issued to the concerned field formations to probe the case. However, no action was initiated against the FBR officials and claimants.
The FTO took suo moto notice of the fraud and directed the tax watchdog to identify the officials involved in the verification of the registered persons (RPs) and initiate disciplinary action.
In pursuance of the FTO’s recommendations and the precedent set in similar cases, the FBR constituted six fact-finding inquiry committees to deal with 130 suo moto cases relating to the fake refund claims.
The Terms of Reference (ToR) of the committees were meant to identify the wrongdoings and involvement of officials in each case and fix responsibility.
Also, these committees were tasked to prepare a draft charge-sheet and statement of allegations with respect to each official and submit a report to the board within 30 days.
President Alvi, in view of the findings of the committees, disposed of the representations of the FBR. He directed the tax watchdog to submit a monthly implementation report to the Federal Tax Ombudsman’s secretariat till the completion of the action in each case.
He also ordered to afford an opportunity of show-cause and hearing to accused officials – in case of any departmental action – to satisfy the requirement of due process.