ISLAMABAD: In response to tax default notices, the Pakistan Sugar Mills Association (PSMA) has urged the Federal Board of Revenue (FBR) to include its relevant officials in the investigation, alleging that they might have submitted incorrect information.

Recently, the FBR has issued notices to 81 out of 89 sugar mills for paying less than the considered income tax on sugar production. The calculations made for the 61 mills amount to non-payment of income tax worth Rs404.20 billion.

Non-payment of income tax on actual production has been calculated mainly for the period 2015-2019.

Tax calculations are still continuing against 20 major sugar mills including JDW, Tandlianwala, Ramzan, Chashma and Premier.

FBR teams are posted at each mill to determine actual sugar production and the taxes are levied based on that quantity in bags that leave the factory premises.

In a letter to the FBR, the association said that all officers posted in sugar mills should be included in the inquiry to determine the difference between actual production and the lesser quantity declared.

PSMA chairman Iskendar Khan also urged the FBR to launch a basic inquiry from the Member IR (Operations) as the matter related to this department.

“The officers who chaired the post of Member IR (Operations) from 2015 to 2019, even if they are retired, need to be included in the inquiry to know the facts as to why the department kept these files closed during the said period,” Mr Khan said.

FBR regional tax offices have launched a composite audit exercise of income tax and sales tax for sugar mills in 2020. The audit teams, after evaluating record of sugar mills, estimated Rs469bn tax default. The audit continues against 20 major sugar mills in the country.

Meanwhile, requesting anonymity, a senior official of the FBR said the total pending tax amount could exceed to Rs1,000bn as the proceedings continues against the 20 major mills of the country.

On the other hand, an office-bearer of the PSMA said notices by the FBR depict that pending income and sales tax amount was almost equal to the development budget of the country.

“In such a case, a serious inquiry has to be launched against the officials posted in all production units in country and not just the sugar mills,” the PSMA official said.

Published in Dawn, March 28th, 2021