Aurangzeb reveals penalties for corporate tax dodgers

Finance Minister Muhammad Aurangzeb revealed that big companies are responsible for nearly half of the Rs3.4 trillion tax evasion in Pakistan. He warned CFOs of these firms against signing incorrect returns to avoid severe penalties, including up to 10 years in jail and heavy fines. The government is initiating a major enforcement operation against tax evaders.

Aurangzeb emphasized the need to increase the tax-to-GDP ratio to 13% for sustainable growth. FBR Chairman Rashid Mahmood Langrial announced the elimination of the category of non-filers from October 14. He also warned CFOs to avoid signing incorrect returns, especially before the deadline.

The FBR plans to introduce sales tax in a VAT mode to combat tax evasion. Data analytics revealed widespread fraud in sectors like iron and steel, cement, beverages, batteries, and textiles. The FBR has detected cases of tax fraud worth Rs227 billion, with major sources being excess input tax claims.

The crackdown will spare no one, including tax officers involved in evasion. The FBR will reform its automation company and enhance human resource capacity for effective enforcement.

Published in Dawn, October 11th, 2024