It is centrally based which will scrutinise all monthly returns. This system is multipurpose as on one hand, it would be serving as "whistle blower" and on the other hand would be plugging the loopholes causing leakage of sales tax due collection. A hand on training of the senior officers of the Board was held at Lahore on Friday.
Welcoming the participants Asrar Raouf, IRS Senior Member, advised the senior management to take advantage of this electronic system and manage the tax system transparently and efficiently. He, also, cautioned that the system would be maintaining performance folders of each officer indicating the cases where they could not act in time which will be made part of his Performance Report of that year. It is further pointed out that as part of CREST IT solution, Risk Management System has been developed to select sales tax returns of those persons which are claiming input tax credit on the basis of fake imports and as well as fake purchases. The system will, also, be showing any zero rated sectors where the sales are made to registered persons who otherwise are non-active, suspended or black-listed and in this way pre-empts their attempt to evade reduced tax of 5 percent on such sales. Other grey areas where this system is focusing are the non-payment of valuation addition tax at the rate of 3 percent and fake exports.
The system has estimated that tax gap is around 50 billion rupees in only four months of the current year. After having identified, the system will confront the persons who have apparently not paying the due tax in guise of fake purchases/sales in order to provide them a chance to explain their position. The fraudsters will be prosecuted who were found to be indulging in fraud as a result of the scrutiny of the data as well as the responses received from compliant taxpayers.
The centralised system shall be shortly sending the detail of the fake purchases/sales to the concerned taxpayers and to concerned tax officers and will be given a time of 15 days either to show the lawful evidence of their purchases or make the tax which they are evaded. It is learnt that this initiative of the new Member Reform, Nisar Muhammad, who has collected a team of domain experts as well as PRAL technologists under the supervision of Shafqat Mehmud, Team Leader, to identify apparently such taxpayers who are totally non-compliant. In the system every efforts have been made not to focus compliant taxpayers except them warning where any other person is trying to commit fraud in their name.