ISLAMABAD: The Federal Board of Revenue (FBR) has initiated action against fake invoices in the steel sector, Profit learnt on Tuesday.
As per documents available with Profit, FBR has written letters to chief collectors of Customs Appraisement and Facilitation, in Karachi, Lahore, Islamabad and Quetta, asking them to submit reports on illegal businesses by May 4.
FBR said that misdeclaration of imported steel was not only hurting the taxpaying local industry but also denting the national exchequer.
Earlier in April, Pakistan Association of Large Steel Producers (PALSP) in a letter to Special Assistant to Prime Minister (SAPM) on Revenue Dr Waqar Masood and the FBR had complained that the practice of taking claims through fake and flying sales tax invoices was resulting in a loss of billions of rupees to the exchequer every month as well as destroying documented steel manufacturers who paying government taxes ethically.
According to the association, the documented and revenue contributing sector was likely to shrink further if tax evasion continued. “The menace of fake invoices that remains unchecked is going to result in the closure of the documented steel sector and will discourage future investments in the sector,” PALSP Secretary General Wajid Bukhari had said.
“According to our understanding, the FBR has a standard operating procedure (SOP) to deal with cases that involve fake invoices and the directorate general of internal audit of Inland Revenue (IR) has powers to check such cases in field formations across the country,” he added.
The association has appealed to the apex body to regulate the problem by mutually working with the association.
It has suggested to the FBR to identify the fake invoices and extended its support in finding a way to deal with the problem in addition to bringing structural changes in the sales tax law to make it impossible for any taxpayer to use flying invoices.