FBR goes after Payoneer, freelancers over billions of rupees transferred from abroad

• FBR says it has uncovered a 'mega scam' involving a foreign company sending funds to 70,000 individuals.
• A sum of Rs60 billion was allegedly transferred without the knowledge of the tax authority over the last 2.5 years.
  
• The amount was sent by Payoneer, which is registered in the US, but has no presence in Pakistan.
  

ISLAMABAD: The Federal Board of Revenue (FBR) has said it has uncovered a 'mega scam' involving a foreign company transferring around Rs60 billion to more than 70,000 Pakistani citizens without the knowledge of the tax authority, The News reported on Wednesday.

Read more: FBR crosses eight-month revenue collection target by Rs18b

The amount was sent by Payoneer, which is registered in the US but has no physical presence in Pakistan.

'27 banks involved'

Remittances were sent on the sale of different items and freelancer consultancy services by engaging 27 different local banks, the FBR said.

A statement, issued by the Islamabad Income Tax Commissionerate, read that payments were made by foreign clients into Payoneer accounts of individual Pakistanis in the USA. The persons who received the funds then withdrew the same amount from a Payoneer Inc. account maintained by Mobilink Micro Finance Bank Limited (MMBL) through a Jazz Wallet, or from Pakistani accounts maintained with local banks inside Pakistan.

45,012 individuals not registered with FBR

FBR officials told The News that out of 75,615 individuals found to have received funds, 45,012 were not registered with the tax authority. Another 17,985 had filed income tax returns but did not pay any tax and never showed any income from international remittances. 

The remaining 12,618 individuals were registered with the FBR and had an NTN, but did not pay any tax or file their tax returns.

In collaboration with the Directorate General of International Taxes, the Commissioner Offshore Taxation, Islamabad initiated an investigation into the money/ income received by Pakistanis on account of provision of various freelancer consultancy services and sale of goods to various individual clients by using the Payoneer platform.

The investigation showed that a huge amount of Rs60,308,760,650 was disbursed to 75,615 beneficiaries using local banks in less than two-and-a-half years.

The beneficiaries

The exercise has resulted in identifying 45,012 persons who are liable to be registered with the FBR and pay tax on the income earned abroad.

Read more: FBR decides against imposing penalty on late income tax returns filers

In the case of non-NTN holders, compulsory registration is to be carried out by the FBR. 

The News has learned that the FBR is to issue bulk notices to individuals who are registered but are non-filers and also to those filer individuals who have not declared taxable foreign income in Pakistan.

Overall tax revenue impact

Sources in the FBR told this correspondent that the overall impact of the tax revenue is expected to be more than Rs10 billion, which is easy to levy and recover on account of the information being of definite nature.

This will not only result in the broadening of the tax base but also will improve the overall tax-to-GDP ratio of the country by adding genuine taxpayers having a regular foreign income.