Federal Board of Revenue’s (FBR) biggest revenue collection arm, Large Taxpayers Office (LTO) Karachi, has found that nine sugar mills did not disclose their credit entries and other transactions.
In its ongoing audit of sugar mills, LTO has found out that these nine mills hid transactions worth approximately Rs. 220 billion in their annual accounts to evade taxes.
The hidden transactions were identified through credit entries and new heads of accounts in the financial statements. This concealed amount makes up about 60 percent of the total sales reported in their statements.
The mills were asked to reconcile the amounts, but they failed to present any plausible explanations. As a result, under Section 111 of the Income Tax Ordinance, 2001, Rs. 85 billion has been imposed on these mills for the recovery of tax, including Rs. 64 billion on concealed amounts.
A total of 29 sugar mills come under the jurisdiction of the LTO Karachi, and the authority has completed the audits of the above mentioned nine firms so far for the past five years. The audit of the remaining 20 mills is still in progress.