The Federal Board of Revenue (FBR) Large Tax Office (LTO) has uncovered a smuggling ring involved in laundering black money and evading taxes through the trade of luxury watches, according to a report by a private television channel.
The Large Tax Office (LTO) raided three high-end watch outlets in Karachi, accusing them of massive tax evasion and violations of sales tax regulations.
The FBR officials raided the “Collectibles” luxury watch outlet in Dolmen Mall, Karachi, where they seized the entire sales and stock record due to non-compliance with Point of Sale (POS) regulations.
Despite reporting only Rs 65 million in sales over the last three years, the actual market value of the watches ranged from Rs 2 million to Rs 10 million each.
FBR sources indicated that the declared stock value of the business was Rs 40 million, but the actual sales were estimated to be around Rs 700 million.
The FBR’s investigation also revealed that the majority of these luxury watches enter Pakistan through smuggling and are used as a means to launder black money overseas.
With a 25% sales tax applicable on these high-value items, the estimated tax evasion on just Rs 700 million in sales amounts to around Rs 180 million.
Authorities have vowed to take strict action against those involved in this multi-billion rupee tax fraud and money laundering scheme.
