Shahzad Akbar reveals govt’s comprehensive plan to hold sugar mafia accountable

The premier’s aide on accountability, Shahzad Akbar, on Sunday unveiled a comprehensive action plan outlined by the government to take to task the “sugar daddies” identified by the sugar inquiry commission as well as for an overall overhauling of the regulatory framework which had all the while “been in cahoots with the sugar mills”.

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“Imran Khan was given a mandate for accountability in 2018. His 22-year political struggle has been for the same. For accountability of the powerful and influential. This was a big test for that mandate,” said Akbar, during a press conference in Islamabad alongside information minister Shibli Faraz.

Akbar said that no matter how powerful a person is, no matter the party he belongs to, or however wealthy, “no exceptions can be created” for anyone, and this was the line of inquiry followed by the probe commission.

“Transparency is of utmost importance when it comes to accountability. Before we take action over whatever matter is being pursued, it must be put before the people. That is why the report was made public,” said the premier’s aide.

He said the public, farmers, as well as industrial experts had been consulted over an “action matrix” that was developed.

Akbar said that the prime minister had approved three sets of actions during a meeting in Bani Gala earlier in the day, which he then proceeded to delineate.

Penal actions, recoveries

These actions form the first set of actions approved by the premier and consist of the punishments to be given as well as the recovery mechanism to be enacted. Within the broad category, seven major actions were recommended.

  1. Investigation of subsidy scandal

Akbar said that the matter of the Rs29bn subsidy scandal will be forwarded to the National Accountability Bureau. “NAB will conduct a criminal investigation to probe who gave the subsidy.”

He said that availing an approved subsidy will not be considered illegal unless with the subsidy some unlawful action was taken. “The factories which violated any terms, which the report shows were almost all factories, will also fall within NAB’s jurisdiction.”

He highlighted the subsidies given since 2014 — Rs6.5bn subsidy for 2014-15, Rs6.5bn subsidy for 2015-16 and a record Rs20bn subsidy for 2016-17 and said that NAB will proceed to file cases for all these instances.

He said that besides the above subsidies approved by the federal government, the Sindh government had also approved a subsidy of Rs4.1bn which too will be investigated by NAB for factors such as cost of production not being determined and no justifiable reason given for the subsidies.

Akbar said that the subsidy in 2018-19 was given by Punjab government, a matter which is also being handed over to NAB to investigate. “If someone has played a role, they will be prosecuted under Section 9 of the National Accountability Ordinance.”

He said another important decision taken was that under NAB laws, which came into effect in 1985, in the last 25 years all subsidies that were given will be probed and a court reference must be filed for the same.

“In 1990, these big political families came and installed their mills under a quota system. One family had dozens of sugar mills and then they themselves would give subsidies. They exported copious amounts of sugar to India and received a lot of subsidy,” said the aide, adding that this entire matter was also being forwarded to NAB so it may file a reference.

He said that so far the names of nine mills had come to light, but in fact, there are around 80 mills which shall all be audited.

  1. Investigation of income and sales tax fraud, evasion and benami transactions

Akbar said the matter of sales tax fraud is being forwarded to the Federal Board of Revenue.

He said that evidence of of sales tax fraud, payment of a lower income tax, and benami transactions has been found in the five year audit of sugar mills carried out by the probe commission. “This matter is being handed over to FBR so recoveries can be made.”

He said that the tax authority is being given 90 days to prepare a report and determine the cases to be filed and must carry out recoveries in the same time frame.

Akbar said that a Rs30bn sales tax fraud was already found in the audit of nine mills but FBR will now have to probe the other 80 or so mills. “A sizeable amount of recoveries can be made this way which will be deposited in the national exchequer.”

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