Massive Tax Scam Uncovered in Pakistan: Rs14 Billion Evaded

A massive tax fraud case has been uncovered in Pakistan, involving fake transactions of Rs84 billion and tax evasion of Rs14 billion within just a few months. The Federal Tax Ombudsman (FTO) launched an investigation after a retired army officer filed a complaint, revealing a sophisticated scam with the involvement of Federal Board of Revenue (FBR) IT personnel.

Key Findings:

• Bogus Supplies: A company in Karachi filed fake sales tax returns, declaring Rs81.434 billion in bogus supplies with a GST of Rs14.658 billion.
• Fake Transactions: The scam utilized dormant sales tax-registered individuals’ IDs, generating Rs1.625 trillion in fake supplies.
• Disabled Checks and Balances: The web portal’s security measures were deactivated, allowing these fake transactions to occur.
• Complicit Officials: The investigation suggests that current and former employees of PRAL and FBR facilitated the fraud.

Investigation and Aftermath:

The FTO probe found that various buyers claimed huge input tax against these fake supplies. The Sales Tax Registration Number (STRN) of the complainant was summarily blacklisted without a proper inquiry.

Next Steps:

The FTO has instructed the FBR to initiate legal proceedings against those involved in the tax fraud.

This case highlights the need for increased security measures and accountability within tax authorities to prevent such large-scale fraud.