FBR reveals New Rs.60bn scam involving a foreign company

ISLAMABAD: The Federal Board of Revenue has found a mega scam involving a foreign company transferring around Rs 60 billion to more than 70,000 Pakistani citizens without knowledge of the FBR.

According to media reports, the amount was sent by Payoneer, which is registered in the United States but has no physical existence in Pakistan.

According to the FBR, the remittances were sent on the sale of miscellaneous items and freelance consultancy services by engaging 27 different local banks, the FBR said.

The FBR issued a statement regarding this big scam. In its report, Islamabad Income Tax Commissionerate said that payments were made by foreign clients into Payoneer accounts of individual Pakistanis in the USA. The individuals who received the funds then withdrew the same amount from a Payoneer Inc. account maintained by Mobilink Micro Finance Bank Limited through a Jazz Wallet, or from Pakistani accounts maintained with local banks located in Pakistan.

According to the FBR officials, 75,615 people have found been to have received these funds, of which 45,012 are not registered with the FBR. Other 17,985 individuals had filed income tax returns but did not pay any tax and had never claimed any income from international remittances.

The officials say that the remaining 12,618 individuals were registered with the tax authority and had their NTN (national tax numbers), but they never paid any tax or file any tax returns.

In collaboration with the Directorate General of International Taxes, the Commissioner Offshore Taxation, Islamabad initiated an investigation into the money/ income received by Pakistanis on account of provision of various freelancer consultancy services and sale of goods to various individual clients by using the Payoneer platform.

The investigation showed that Rs 60,308,760,650 were disbursed to 75,615 beneficiaries using local banks in less than two-and-a-half years.

The beneficiaries

The exercise has identified 45,012 persons who are liable to be registered with the FBR and pay tax on the income earned abroad.

In the case of non-NTN holders, compulsory registration is to be carried out by the FBR.

According to The News , FBR will issue bulk notices to individuals who are registered but are non-filers and also to those filer individuals who have not declared taxable foreign income in Pakistan.

Overall tax revenue impact

Sources in the FBR told this correspondent that the overall impact of the tax revenue is expected to be more than Rs 10 billion, which is easy to levy and recover on account of the information being of definite nature.

This will not only result in the broadening of the tax base but also will improve the overall tax-to-GDP ratio of the country by adding genuine taxpayers having a regular foreign income.