FBR to pursue four major sugar mills in a bid to recover billions of rupees in sales tax evasion

ISLAMABAD: The Federal Board of Revenue (FBR), the country’s top tax body, has decided to pursue four major sugar mills in a bid to recover billions of rupees in sales taxes they allegedly avoided paying to the exchequer over the last five years.

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The action is being taken on the findings of the Sugar Inquiry Commission (SIC), after the incumbent government took the momentous decision to make its findings public.

The Bureau has also decided that any benami transactions identified by the Commission will be investigated by its respective Benami Zones before references are formally filed against those involved.

After the massive scale of tax evasion was uncovered by the SIC, the FBR has decided to implement a track and trace system for three sectors — sugar, cement and fertilizer — starting from July. It believes the move will help in gauging the actual production of these sectors and therefore help in more accurate collection of taxes.

“We are going to open up audit cases of four major mills identified by the Sugar Inquiry Commission […] to create demand and then recover billions of rupees in evaded taxes,” a top FBR official disclosed to media on Saturday.

The official said the Commission had utilised FBR’s data to investigate the sugar mills, but now, under the law, the FBR can open up an audit of the four major mills after the Eid holidays.

Earlier, the Commission had held several millers responsible for evading billions of rupees in taxes and recommended that the matter be referred to the FBR for recovery of dues.

“The matter needs to be referred to the FBR with the instructions to recover the sales tax evaded by sugar mills during the last one year on additional amount of ex-mill price exceeding the FBR threshold of Rs60/kg. Further, the FBR should take steps to immediately start collecting sales tax on actual prevailing ex-mill rates instead of benchmark rates of Rs60/kg,” the Sugar Inquiry Commission recommended to FBR in its detailed report.

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