ISLAMABAD: The Federal Board of Revenue (FBR) has unearthed tax evasion of billions of rupees carried out through the registration of fake textile manufacturing units.
Sources said that the Directorate of Intelligence and Investigation Lahore has discovered 11 fake textile manufacturing units involved in an overall tax evasion of Rs522 million between 2014 and 2018.
The chief commissioner Inland Revenue has applied for cancelling the registration of these fake units and their blacklisting, said the sources.
An initial investigation is also underway to discover similar units, with the sources suggesting that more people may be availing a zero-rating facility to obtain a sales tax exemption through the registration of fake manufacturing units.
The FBR has set zero-rated tax benefits for those doing business in textile, sports, leather and surgical goods, and registered as an importer, exporter, manufacturer or wholesaler.
The sources said that persons involved in the tax theft were commercial importers posing as manufacturers in order to avoid tax.
The directorate has also discovered 11 persons who posed as manufacturers, but when an investigation team arrived at the registered address, no manufacturing unit was found there, showing that dummy units were being used for tax theft, causing billions of rupees worth of loss to the national exchequer.