“Borrowing money through RBF to achieve tax revenue target is wrong”
ISLAMABAD: Pakistan’s Auditor General’s Department has called the practice of the Federal Bureau of Revenue (FBR) of borrowing money from multinational corporations to meet tax revenue target as wrong. The PAC subcommittee gave the FBR six months to make recoveries in various cases.
A meeting of the PAC subcommittee chaired by Senator Sherry Rehman was held on Wednesday during which the audit objections related to the RBF from the year 2010-11 to 2017-18 and the reimbursement case of 16, 9 billion rupees from five companies were examined.
When examining a particular case of repayment of 16.9 billion rupees to five companies (MCB Bank Ltd, M/s Government Holding (Pvt) Ltd, M/s Pakistan Telecommunication Authority and OGDCL) in 2011, the auditor said that FBR paid the refund in three cases although there was no refund request. The audit officials further disclosed that the FBR used to borrow money at the end of June to show that it met the tax collection target. FBR officials admitted before the committee that in the past, the FBR used to borrow from multinational companies to meet its revenue targets, but two years ago, the FBR abandoned this practice. “These decisions were taken at the level of the finance ministry and the prime minister,” RBF officials told the committee. Sherry Rehman said this RBF exercise is causing problems for provinces under NFC. The issue of recoveries was also discussed at the meeting and PAC manager Sherry Rehman ordered FBR officials to recover the amount within six months. Syed Naveed Qamar, member of the committee, explained why FBR does not have a specific time frame for recovery. “The FBR should make a law in which a specific recovery period should be granted,” he added.
Speaking to the media after the committee meeting, Sherry Rehman said we have had cases before us for 10 years; there is no time limit for their recovery. “I gave them six months for 10 years recovery but they were saying give us more time but if the performance is better then recover,” she said, adding that if the country does not work on own taxes, you will take more and more loans.