Biggest tax evasion case of builder unearthed


Observer Report

Islamabad—Directorate General of Intelligence and Investigation Inland Revenue (IR) has unearthed the biggest tax evasion case of a builder/developer in the history of Pakistan involving approximately tax liability of Rs 58.8 billion calculated on total tax concealment of Rs 117.6 billion.
The analysis of 4 banks’ data, inspection of records and detailed scrutiny of data exposed concealment to the tune of Rs 117.6 billion. This is the biggest tax concealment case in the history of FBR within the real estate sector and recovery of the evaded amount may result in contribution of approximately Rs 58.8 billion in the national kitty. The directorate has detected total concealment of Rs 117.6 billion, tax Rs 29.4 billion @ 25 percent average. Penalty 100 percent of tax comes to Rs 29.4 billion. Total tax liability comes to approximately Rs 58.8 billion. The quantum of tax evasion is so high that only one mega case could result in sudden increase in revenue collection of the FBR.
FBR officials said that the credit definitely goes to Khawaja Tanveer Ahmad, a top officer of Inland Revenue Service, who is also Director General of Intelligence and Investigation Inland Revenue, who supervised/monitored and pleaded case despite immense pressure from powerful groups and lobbies. However, Karachi based courageous officials of the agency completed the investigation against this biggest builder/developer of Karachi.
Directorate General of I&I IR has taken a historic initiative to unearth massive concealment of income by an influential real estate developer of Karachi. Through analysis and investigation of records, preliminary data exposed concealment to the tune of billions by the said real estate developer. Such actions against big sectors have pointed towards the seriousness of the agency to assist the FBR in achievement of the assigned revenue collection targets for 2015-16.
Keeping in view sensitively of some big cases, the agency has completed the legal formalities of taking prior permission of high-ups and availability of irrefutable evidence for taking action against the units. For the first time in the history of FBR, the Directorate General of Intelligence and Investigation Inland Revenue has continued its investigations in real estate sector to ensure recovery of concealments involving billions of rupees. As a result of these actions, the Directorate General of Intelligence and Investigation IR has emerged as top investigative agency in detection of tax frauds in the country, sources maintained.
Details of the case revealed that the credible information was received by the Directorate of I&I-IR, Karachi, from field visit that the business activities of a proprietor of builders and developers of Karachi are not commensurable with his declared versions. Reportedly, the proprietor of builders and developers was executing more than one dozen construction projects under various titles. Each project was being executed under the umbrella of a separate AOP, with different partners and terms of conditions, to hide income and evade due taxes. In addition a significant number of investors have made investments in these projects and retrieval of such information would be useful in Broadening of Tax Base (BTB) activities.
Accordingly, action under section 175 of the Income Tax Ordinance, 2001 was carried out on the principal business place of the taxpayer located in Karachi, and the team resumed relevant record for further scrutiny, On the basis of information, relating to bank accounts, letters were written to the Mangers of relevant Bank / Branches for provision of bank information in respect of various bank accounts associated with taxpayer. Perusal of bank statements has endorsed the contention of the Directorate.

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