Aik News: Illegal input tax credit claims exceeding Rs41.78 billion have been uncovered in the sales tax system.

According to an audit document, illegal tax credits were adjusted against invoices issued by suspended and blacklisted taxpayers. The audit found that 159 registered taxpayers across 12 Federal Board of Revenue (FBR) offices claimed fraudulent input tax credits. It also revealed that timely legal action was not taken against the false input tax credit claims.

According to the FBR, the recovery process for more than Rs560 million has already been initiated. Show-cause notices have been issued in cases involving more than Rs6.93 billion, while legal proceedings have been initiated in cases worth over Rs21.67 billion. Cases involving more than Rs12.61 billion remain under investigation.

The Departmental Accounts Committee (DAC) has directed the authorities to expedite recoveries and complete legal proceedings at the earliest. The audit has also recommended fixing responsibility on those involved and strengthening internal controls within the tax system to prevent similar irregularities in the future.