A retired armed forces personnel and proprietor of Gravity Traders has accused the Pakistan Revenue Automation Limited (PRAL) and the Federal Bureau of Revenue (FBR) of facilitating tax fraud through his dormant tax account.
He alleges that, from the period September 2023 to January 2024, his account was used to commit fraudulent transactions amounting to Rs. 81.434 billion. This translates to a shortfall of Rs. 14.658 billion from GST to the Public Exchequer.Â
In a detailed complaint lodged with the Federal Tax Ombudsman (FTO), he specifically targets the Commissioner Zone-III, accusing him of illegally blacklisting his Sales Tax Registration Number (STRN) without proper notification, a requirement under Section 21 of the Sales Tax Act, 1990.Â
During the period in question, he insists that his account was dormant with “NULL” sales tax returns filed, signifying no sales or purchases.
The case highlights systemic vulnerabilities within the FBR, where dormant accounts are exploited for fraudulent activities. Muhammad Shareef, the complainant, underscores the administrative failure that led to the misuse of his dormant account without his consent.
This is not an isolated case within Pakistan’s tax administration. A previous incident involved Rs. 11.6 billion fraud, also facilitated through internal breaches within the FBR. Despite the FBR’s assurance that their officers played no part, the recurrence of such fraud calls for stringent internal controls and accountability.
The FTO has directed the Chief Commissioner-IR, LTO Lahore, to initiate legal proceedings to address this tax fraud, ensuring that those responsible are held accountable under the law.Â
Moreover, the Member IT, FBR, has been tasked with investigating the breach and implementing necessary corrections to safeguard data integrity.
This ongoing investigation into the alleged fraud underscores the need for robust security protocols and vigilant regulatory oversight to prevent the exploitation of financial systems and protect taxpayer rights.
