FBR recovers Rs6.2 bn evaded tax from business group

ISLAMABAD: The Federal Board of Revenue (FBR) has recovered the highest-ever tax liability from an individual to the tune of Rs6.2 billion at a time when the FBR is running from pillar to post for achieving its revised target for the outgoing financial year.

The FBR’s Directorate General Intelligence & Investigation (I&I) Inland Revenues (IR) has made the highest ever recovery of tax liability amounting to Rs6.2 billion, from a couple, Bashir Dawood and Maryam Dawood, of the Dawlance Group under the Anti-Money Laundering Act 2010.

On Friday (May 26), the Inland Revenue Intelligence recovered this amount after the hearing at the Special Court Customs & Taxation Karachi, where the trial of Dawoods, allegedly accused of tax evasion, tax fraud, and money laundering was going on.

Never in history before such a huge recovery has been made by any agency of the government of Pakistan in the case of individuals involved in any financial crime, whether corruption, laundering, drug trafficking, smuggling, etc.

It is pertinent to mention that the name of Dawood family was also among the PanamaLeaks, and in the reference case of sale of Dawlance to a Turkish industrial group, a shell company located in the British Virgin Islands was used by the accused persons to launder the proceeds of crime, i.e. tax evasion and tax fraud, which are predicate offences under the Anti-Money Laundering Act 2010.

The Director General, Khawaja Tanveer Ahmed, declared this a landmark case in the history of FBR, and admired the efforts of I&I-IR team who worked relentlessly on this case. He maintained that keeping the same path, the Directorate General would be able to recover billions of looted money of the government exchequer.

On 26.05.2017, the Directorate of Karachi received cheques of Rs6.2 billion of evaded tax in the case of Bashir Dawood & Ms Marium Dawood before the Court of the Special Judge Customs, Taxation and Anti-Smuggling Karachi. 

Bashir Dawood and Mariyam Dawood were major shareholders in three companies namely M/s United Refrigeration (Pvt) Ltd, M/s Dawlance (Pvt) Ltd and M/s Dawalance Electronics (Pvt) Ltd till the year 2013. By the end of year 2013, they sold M/s Dawlance Electronics (Pvt) Ltd to a BVI Company (M/s Pan Asia Equity (Pvt) Ltd) for $3.3 million and dividends of $35 million were remitted to BVI during the next three years. Afterwards, in September 2016, all of the above referred three companies were purchased by a Turkish company for consideration of $242 million. The sale value of M/s Dawlance Electronics (Pvt) Ltd, that was sold at $3.3 million three years ago, the deal was $94 million. After these suspicious transactions, the authorities traced and attached five bank accounts of Bashir Dawood and Mariyum Dawood, having deposits of Rs19.72 billion. After taking over the case, I&I-IR Karachi gathered the evidence, linked them with each other and immediately lodged an FIR/complaint under Section 191A/203 of Income Tax Ordinance, 2001 read with Section 3 & 8 of Anti-Money Laundering Act, 2010 in the Court of Special Judge Customs, Taxation Karachi.

There were certain hearings before the Court of Special Judge, where I&I-IR Karachi through their IO Muhammad Arif, convinced the court in favour of their case and finally was able to get arrest warrants for both the accused. Consequently, the attorney of Bashir Dawood and Mariyum Dawood agreed to deposit the evaded amount of tax before the court. The Special Public Prosecutor undertook on behalf of the department that subject to the deposit of entire amount i.e. Rs6,204,374,789/-, the department would withdraw the complaint after getting approval of higher authorities. The accused submitted four cheques of the entire amount Rs6.2 billion in the court. 

Finally, on 26.05.2017, the department moved an application of withdrawal of complaint under Section 22(2) of the Anti-Money Laundering Act, 2010 along with Office Memorandum issued by the Ministry of Law and Justice dated 22.05.2017 regarding the withdrawal of complaint. The attorney and advocate of accused also submitted affidavits in the court that they would not challenge the proceedings and the tax payment in any court of law. 

Accordingly, the court dismissed the complaint with the direction to handover the cheques of Rs6,204,374,789/- to Directorate of I&I-IR. After recovery of the entire amount in favour of government exchequer, the accused are entitled to operate their accounts.