Training of risk-based electronic Whistle-blower system arranged in Lahore

In order to protect compliant taxpayers of Sales Tax, they will be cautioned beforehand about attempts, if any, being made on their transactions for issuing fake invoices. Mr. Arshad Ali Hakeem, Chairman FBR with his IT background has developed and got in place a risk based electronic system which will be interacting with the taxpayers electronically in case where any person is trying to defraud the taxpayer. It is centrally based which will scrutinize all monthly returns. This system is multipurpose as on one hand, it would be serving as “blow whistler” and on the other hand would be plugging the loopholes causing leakage of sales tax due collection. A hand on training of the senior officers of the Board was held at Lahore today.

Welcoming the participants Mr. Asrar Raouf, IRS Senior Member advised the senior management to take advantage of this electronic system and manage the tax system transparently and efficiently. He, also, cautioned that the system would be maintaining performance folders of each officer indicating the cases where they could not act in time which will be made part of his Performance Report of that year. It is further pointed out that as part of CREST IT solution, Risk Management System has been developed to select sales tax returns of those persons which are claiming input tax credit on the basis of fake imports and as well as fake purchases. The system will, also, be showing any zero rated sectors where the sales are made to registered persons who otherwise are non-active, suspended or black-listed and in this way preempts their attempt to evade reduced tax of 5% on such sales. Other grey areas where this system is focusing are the non-payment of valuation addition tax @ 3% and fake exports. The system has estimated that tax gap is around 50 billion rupees in only 4 months of the current year. After having identified, the system will confront the persons who have apparently not paying the due tax in guise of fake purchases/sales in order to provide them a chance to explain their position. The fraudsters will be prosecuted who were found to be indulging in fraud as a result of the scrutiny of the data as well as the responses received from compliant taxpayers.
The centralized system shall be shortly sending the detail of the fake purchases/sales to the concerned taxpayers and to concerned tax officers and will be given a time of 15 days either to show the lawful evidence of their purchases or make the tax which they are evaded. It is learnt that this initiative of the new Member Reform Mr. Nisar Muhammad who has collected a team of domain experts as well as PRAL technologists under the supervision of Mr. Shafqat Mehmud, Team Leader to identify apparently such taxpayers who are totally non-compliant. In the system every efforts have been made not to focus compliant taxpayers except them warning where any other person is trying to commit fraud in their name. The system has connected the tax collected machinery electronically throughout the Pakistan with Centralized Monitoring System. The finding of the system will be utilized in stopping the illegal refunds as well as recovering the same where these have already been paid. The system is real-time, home-ground and discretion free. The Senior Member IR Policy also announced that the system developers and those responsible for its operation will be rewarded in accordance with their performance. The system is yet another IT attempt by the Chairman to make the performance of FBR transparent, efficient and professional.

Mohammad Shahzad
Secretary PR