In a decisive move to address the rampant issue of sales tax frauds, the Prime Minister has constituted a Joint Inquiry Team with immediate effect. The team comprises a diverse group of officials and experts, each bringing their unique expertise to the table. The members of the team are:
1. **Musadiq M. Malik, Federal Minister** – Convener
2. **Bilal A. Kayani, MNA** – Member
3. **Mr. Tanvir Akhtar Malik, Member (FBR)** – Member
4. **Ghazi Akhtar Khan** – Member
5. **Dr. Fareed Zafar** – Member
6. **Representative of IB** – Member
7. **Munir Masood Marath, Director/ADG(North), FIA** – Member
8. **Representative of Financial Monitoring Unit (FMU)** – Member
9. **Mr. Amir Abbas Khan, Director I&I-IR Hqr.** – Member.
The Inquiry Team has been tasked with a comprehensive set of Terms of Reference (ToRs) aimed at tackling the multifaceted issue of sales tax fraud. These ToRs include:
1. **Examination of IB Reports**: The team will scrutinize the Intelligence Bureau (IB) reports on sales tax fraud cases, focusing on the financial and accounting transactions involved. A key aspect of this examination will be identifying any collusion between public officials or PRAL employees and the perpetrators of these frauds.
2. **Role of FTO**: The team will assess the role of the Federal Tax Ombudsman (FTO) and its decisions that have impacted the legal proceedings of tax fraud cases. This includes evaluating the FTO’s public communications, such as press conferences and media talks.
3. **Policy and Enforcement Loopholes**: The team will study the existing policy, automation, and enforcement mechanisms to identify loopholes that facilitate sales tax frauds. Particular attention will be given to issues like inadmissible input adjustments and the use of fake or flying invoices. The team will propose measures to address these vulnerabilities.
4. **Recommendations for Action**: The team will recommend specific actions to be taken against those involved in sales tax frauds. This includes both departmental and penal actions aimed at curbing such activities and preventing maladministration by FBR officers and officials.
5. **Improvement of FBR Modules**: The team will suggest improvements to the sales tax-related modules of the Federal Board of Revenue (FBR) to close the automation gaps that have been exploited in past frauds. These improvements are expected to reduce the frequency of scams and prevent significant revenue losses for the government.
6. **Additional Issues**: The team will also address any other issues related to the above points that may arise during their investigation.
The Inquiry Team has been given a 30-day deadline to submit its report. The Federal Board of Revenue (FBR) will notify the team and provide the necessary secretarial support.
An official highlighted that Pakistan is not receiving financial aid from other countries, which has prompted the government to take stringent measures to generate revenue internally by plugging leakages. Previously, Pakistan received funds from the USA during the wars in Afghanistan. The official emphasized that policies should be designed to ensure that the industry does not suffer as a result of these measures.
The formation of this Inquiry Team marks a significant step towards enhancing the integrity of Pakistan’s tax system and ensuring that sales tax frauds are effectively addressed.