ISLAMABAD - The Federal Board of Revenue (FBR) has reportedly unearthed a huge tax fraud scam from the international contractors working on Pakistan.
FBR has traced out an organised alleged tax evasion of multi-billion rupees by international contractors in multilateral and bilateral donors funded projects in Pakistan that is continuing unabated for the last several years.
Official documents available with The News also prove modus operandi involved and its operational mechanism first time in the country’s history by the tax department that how aid money of millions of dollars went back into pockets of donors and their attached international contractors through different ways and means instead of being utilised here on the poor and vulnerable segments of society in recipient countries especially in case of Pakistan.
A complete tale of this unearthed alleged scam done by the FBR on the USAID funded projects came on surface when the FBR conducted recent exercise to trace out “high net worth” cases of tax evasion in its ongoing efforts to broaden the tax base.
At a time when the FBR is facing massive tax shortfall of over Rs100 billion in first five months of the current fiscal and the government is considering introducing mini budget before the Parliament next month, the international contractors are allegedly found involved in tax evasion through huge payment to expatriate employees without tax deduction at source, inadmissible head office expenses and non-compliance of withholding tax regime in Pakistan thus evading billions of rupees due taxes.