Daily Times

That the Federal Board of Revenue (FBR) has unearthed a major case of money laundering and tax evasion and issued non-bailable arrest warrants against the CEO and CFO of the company that was involved in the practice is welcome news. It turns out that the company in question was using all the tricks in the book, from complex accounting techniques to an intricate network of shell companies, to trick tax authorities and launder money. The Bureau’s Directorate of Intelligence and Investigation – Inland Revenue (I&I-IR), which had been investigating the company’s suspicious transactions and money trail for a while, must be credited for this breakthrough. There is every reason to believe that a lot of shady characters are running outfits that employ just such techniques to move money around in complete violation of the law; causing the country’s formal money transferring channels and the economy much harm in the process.

The present government has made a big deal about cracking down on all practices that involve tax evasion as well as money laundering. That is why the Bureau will no doubt receive a well-deserved pat on the back for this one. Yet it is also important to realise that just one such successful incident, welcome though it is, will not get the job done. People are able to set up such companies and then indulge in all sorts of fraudulent malpractices so easily all the time only because of the widespread knowledge that the law hardly ever catches up with criminals in such cases. And on the rare occasion that it does, it is rather easy to just grease some palms and just get on with business as usual.

It is needed, therefore, for such crackdowns to become the norm rather than the exception. FBR has had a somewhat disturbing reputation of disappointing when it comes to its most basic function, which is to expand the tax net and thereby increase tax revenue, which is why such instances are always welcome. Hopefully the present case will reveal patterns and provide important leads and the operation can expand. Anybody who has been eating off the fat of the land so mercilessly must be traced and apprehended so important precedents can be set. FBR must expand its net in this direction even as it struggles on the revenue front. *