Misuse of CNICs: FBR unearths scam worth billions in auto industry

ISLAMABAD: The Federal Board of Revenue (FBR) Karachi chapter has recently detected a fraud worth millions of rupees in which car dealers were found involved in registering vehicles by misusing the computerised national identity cards (CNICs).

Sources said the FBR’ Anti-benami Karachi office, during an investigation in a case against Muhammad Khadeen, had detected a big fraud as well as tax evasion in which some dealers were found involved in registering around 400 luxury vehicles worth billions of rupees in the name of Khadeen.

Sources said Suzuki Riaz Motors, Zeeshan Autos and Suzuki south and some other sub dealers have been involved in registering vehicles in unknown persons’ names.

FBR has received details of millions of people from gas and electricity departments who pay bills in millions on yearly basis but are not paying any tax.

Sources said that the FBR’ broadening of tax base has also collected data of 0.748 million people from 10 motor vehicles registration authorities of 10 large cities of Pakistan. These people had purchased vehicles above 1300cc in different times, but are not paying taxes, they added.

The Karachi’s Motor Vehicle Registration Authority had provided details of 0.297million, Excise Department Islamabad 0.127, Motor Vehicle Registration Authority Faisalabad 13,523, Motor Vehicle Registration Authority Gujranwala 3,805, Motor Vehicle Registration Authority Rawalpindi 1,490, while Motor Vehicle Registration Authority Lahore had shared details of 0.34472 million people.

On the other hand, car manufacturers had also provided details as well as records of some 0.271 million people.

Sources said the anti-benami initiative zone-III has also summoned car dealer who had made purchase/booking in the name of Muhammad Khadeen from Pak Suzuki Motors.

The owner of the showroom showed willingness to deposit the amount worth millions, sources added.

Earlier, a case was also emerged in which a front man of a leading car assembler purchased 32 vehicles on a deceased man’s CNIC and subsequently FBR initiated an inquiry against him.

The Financial Action Task Force (FATF) in its report had revealed a nexus between a commercial enterprise including used car dealerships, restaurant franchises and terrorist organisations.

The government has started compliance against the anti-money laundering in different sectors on the recommendation of FATF but car manufacturers are not properly doing enhanced due diligence (EDD), customer due diligence(CDD) and AML compliance to check the misuse of CNICs.

Sources said FBRs anti-benami is considering referring this case to the Federal Investigation Agency and the FBR’ Intelligence and Investigation directorate on account of misuse of CNIC and tax evasion.

An official of a car manufacturing company told this scribe that they have many times communicated to car dealers to stay away from fake CNIC booking.

The Engineering Development Board (EDB), the regulator of the auto sector, is also acting as silent spectator about this matter.

“We deal with manufacturing of cars and not sales,” an EDB official told this scribe.

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The writer is a member of Pakistan Today's Islamabad bureau. He can be reached at [email protected]

2 COMMENTS

  1. The car manufacturers/assemblers cannot escape their responsibility of reporting to FBR, and blocking booking of another car for a year or any period determined, on the same CNIC

  2. The car manufacturers/assemblers cannot escape their responsibility of reporting to FBR, and blocking booking of another car for a year or any period determined, on the same CNIC

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