Islamabad: The Federal Board of Revenue (FBR) has updated its definition of "tax fraud" and launched a dedicated investigation wing aimed at enhancing the enforcement of tax laws and curbing tax evasion. The announcement came on July 25, signaling a significant shift in the government's approach to handling tax-related discrepancies.
According to Zameen.Com, the FBR's new definition of tax fraud now encompasses actions such as the deliberate understatement of tax liabilities, overstating claims for tax credits or refunds, submitting false tax returns, and concealing accurate financial information. In response to these challenges, the FBR has established the Tax Fraud Investigation Wing-Inland Revenue. This new unit is tasked with detecting, analyzing, investigating, and preventing tax fraud across various sectors. The wing is structured into several specialized units including Fraud Intelligence and Analysis, Fraud Investigation, Legal, Accountants, Digital Forensic and Scene of Crime, and an Administrative Unit.
Further tightening its regulatory framework, the FBR has also implemented stringent penalties under the revised Federal Excise Act 2005 for retailers involved in selling cigarette packs without proper tax stamps or using counterfeit stamps, banderoles, stickers, labels, or barcodes. Retailers found in violation of these regulations may face severe consequences, including the sealing of their business premises.
Additionally, amendments to the Sales Tax Act now empower the FBR to mandate the integration of businesses' electronic invoicing systems with its Computerised System. This measure is intended to facilitate real-time reporting of sales, thereby enhancing transparency and compliance in tax reporting.