Despite launching massive recovery exercise against 127 multinational companies, Federal Board of Revenue (FBR) is still unable to recover Federal Excise Duty (FED) amounting to Rs 29.588 billion; it is learnt here on Tuesday. According to sources, the board after scrutinising taxpayers’ records for the period from July 2008 to June 2014 had established a list of non-FED payers and declared 127 multinational businesses as defaulters of Rs 29.588 billion FED.
They said the list was compiled after comparing income tax, deducted under section 152(1) of the Income Tax Ordinance, 2001, and FED paid on franchise services. Moreover, sources said the companies, which were included in the list, were financial institutions, automobile companies, electrical industries, trading companies, IT firms, pharmaceutical companies, power companies, etc.
They said these companies during the aforesaid period had remitted Rs 295.88 billion to its parent companies and paid Rs 31.233 billion income tax under section 152(1) of the Income Tax Ordinance, 2001. However, majority of these companies, which were liable to pay 10 percent FED on total remitted amount, did not bother to deposit the same in the kitty, they added.
Keeping the factual position in view, the board has communicated the list to its field formations to ensure FED payments under section 152(1) of the Ordinance. According to the lists, Karachi LTU had to collect Rs 11.05 billion FED while Rs 11.67 billion should have been credited at Islamabad tax office, Rs 5.18 billion at Lahore LTU, Rs 17.6 million at Multan RTO, Rs 1.1 million at Peshawar RTO, Rs 2.4 million at Rawalpindi RTO and Rs 0.25 million at Sialkot RTO.
However, tax offices are unable to generate substantial revenue through this exercise. Official sources, on condition of anonymity, confirmed that this exercise had completely failed to yield desired results as majority of the companies had filed suits in courts and the matter was now sub judice.