Money laundering: top official investigating dozens of cases


The Directorate General of Intelligence and Investigation Inland Revenue (IR) is seriously investigating two dozens cases of money laundering on reports of Financial Monitoring Unit (FMU), pursuing cases of real estate sector, ghee and beverage units in courts and taking action in over 100 mega cases of high-net individuals, manufacturers-cum-retailers, education/medical and other leading sectors/industries.

Sources told Business Recorder here on Sunday that the federal government’s designated agency has the mandate to investigate and prosecute offence of income tax evasion under anti-money laundering regime. The AML Cell of I&I IR is receiving financial intelligence like suspicious transaction reports from the Financial Monitoring Unit (FMU) of the State Bank of Pakistan (SBP).

The serious investigations are focused on 2 dozen cases of money laundering detected on the reports of FMU. This directorate was recently notified as the agency to investigate offences of income tax evasion under anti-money laws.

Director General of Intelligence and Investigation Inland Revenue has given top priority to pursue cases pending in courts for recovery of the evaded amount of duties and taxes. In such cases tax evaders and fraudsters have attempted to obtain stay orders from courts to stop investigators from making legitimate cases of tax frauds involving billions.

Lawyers were hired by such evaders on hefty fees to obtain stay orders from court against the agency. The agency is strongly pursuing cases in courts particularly in sectors of beverages, real estate sector, ghee units and other sectors. Applications have been filed in different courts by the directorate to ensure speedy recovery of the evaded amount of taxes. In this regard, directorate has deputed special teams to pursue cases in courts.

The agency has also framing a large number of cases against super rich individuals, who are earning huge incomes/profits but operating out of the tax net. The cases against high-net individuals would also result in huge recoveries, bringing them into documented regime.

Sources said that the directorate has detected over 100 major cases of tax evasion, concealment, understatements and tax frauds in real estate sector, super rich individuals and other leading sectors/industries, causing massive loss to the national kitty during last two months.

The agency has recently framed cases against medical practitioners, pharmaceutical labs, soap sector, ghee/cooking oil units and local supply of sugar by a ghee manufacturer.

In one case, a ghee manufacturing unit of Lahore was involved in sales tax evasion on supply of sugar of Rs 2.2 billion. In other cases, evasion has been detected in soap sector and education sector.

The agency is also strongly pursue a major case of alleged tax evasion involving around Rs 7 billion against an international beverage company at the level of judicial fora.

The Directorate of Intelligence and Investigation IR Islamabad has conducted raids on different malls and clothes retailer in Rawalpindi for allegedly committing tax fraud.

Sources said that big cases have been detected and legal action has been taken against fraudulent units. Recovery of billions is under way from the defaulted units. Despite immense pressure from certain quarters, the Directorate General of I&I IR has taken a bold initiative to unearth massive concealment of income by different sectors.

Through analysis and investigation of records, data exposed concealment to the tune of billions by the said real estate developer during last few months. Such actions against big sectors have pointed towards the seriousness of the agency to assist the FBR in achievement of the assigned revenue collection targets.

Keeping in view sensitively of some big cases, the agency has completed the legal formalities of taking prior permission of high-ups and availability of irrefutable evidence for taking action against the units. As a result of these actions, the Directorate General of Intelligence and Investigation IR has been emerged as a lead agency in detection of tax frauds in the country, sources said.

Another key initiative of the Directorate General of Intelligence and Investigation IR is the action against high net worth individuals who have made huge investments in real estate assets which involve understatements of the value and tax evasion.

The agency detected tax aversion in paper and paper board sector, petroleum sector, manufacturers-cum-retailers and other sectors. The agency has also taken serious action against local manufacturers of cigarette in cases where evasion of Sales Tax and Federal Excise Duty is taking place.

In petroleum sector, the agency has carried out detailed analysis of the available records and detected huge amount of tax evasion by one of the leading petroleum companies.

The special teams of the agency found an illegal activity of filing of multiple sales tax returns on a single date in violation of provisions of Sales Tax Act, 1990 and unearthed a number of units involved in such activity.

In another major case, as per work orders issued by District Officer (Roads) and District Officer (Buildings), Faisalabad, many contractors were awarded contracts for different development works worth millions of rupees. The perusal of the work orders revealed that the contractors purchased taxable goods for execution / completion of the contracts.

The directorate has also focused on units involved in misuse of zero-rating regime, fake invoices and claim bogus sales tax refunds on fake exports. -Business Recorder 

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