KARACHI: Identifying massive tax evasion by sugar mills operating in Sindh, Punjab and KP through under-reporting of stocks and fake sales, the Federal Board of Revenue (FBR) has decided to carry out investigative audit of sugar manufacturers located in three provinces by special audit panels.
According to media reports, the FBR has planned to hire private auditors to scrutinise books of sugar millers to catch tax cheats as they spotted a number of discrepancies in various production and supply cycles, reported The News.
“The audit would be conducted under various provisions of Sales Tax Act, 1990 and would be done by special audit panels comprising officers of Inland Revenue and independent chartered accountants,” the FBR said in a note to its regional offices.
The FBR said sugar sector analysis revealed huge tax evasion in sugar sector and it was evident that the stocktaking carried out by field formations of FBR, and the sugarcane commissioner of three provinces had a difference of 641,000 tons. “This showed that the sugar mills were under-reporting their stock in order to evade tax payments.”
Sources quoted in Business Recorder said that panel would prepare daily report of crushing, sugar production and number of bags etc and send to Pakistan Sugar Mills Association, FBR, Chief Commissioner Inland Revenue and would also compile total production of sugar and by-product at the end of the season with adequate information of opening and closing stocks.