Just a day after raiding the National Testing Service (NTS) headquarters, the Federal Board of Revenue (FBR) has given the service another substantial jolt by claiming to have found major discrepancies in their tax return declarations and bank account statements.
During the Monday’s raid, the FBR confiscated four main computer servers, various drafts and laptops. The bureau released a statement on Tuesday, following backlash against the way the NTS headquarters were raided.
The FBR has also revealed that NTS did not disclose their foreign currency accounts in their tax returns.
Clarifying its position, the FBR maintained that the testing service’s financial affairs were scrutinised under section 176 of the Income Tax Ordinance, 2001. It further clarified that under section 175 of the Income Tax Ordinance, the bureau has full access to a company’s premises, accounts, other related documents, inventories and computers.
NTS documents related to both income and sales tax were examined and the findings were less than rosy for the testing service, especially since they had claimed in the past that all their transactions were transparent, according to the FBR statement.
It also stated that records from the NTS board of directors were also under scrutiny where “sources of investment viz-a-viz their declarations are also not matching, for which separate proceedings are underway”.
The statement reiterated that all steps taken were strictly in accordance with the law, and no illegality was committed by the bureau.
The FBR statement came soon after NTS Chief Operating Officer (COO) Sherzada Khan, in a presser at the National Press Club, claimed that the raid was illegal and the NTS would be approaching the court against it.
Another point to note is that the NTS board of directors, consisting of five members, are all from the Comsats Institute of Information Technology (CIIT). They include NTS rector, registrar, treasurer, campus director and examination controller.
The national testing body, although under scrutiny from different media and public avenues, has never been officially held accountable for its finances before this raid.
NTS has been crippled after the FBR raid as their operations have come to an abrupt halt following the confiscation of their main servers. These servers contained data pertaining to test results and examination details of thousands of students who now have no other choice but to wait.
The testing service has decided to move the Islamabad High Court against, what they deem, an ‘illegal’ headquarter raid.
“The FBR raid was completely illegal and they cannot do what they did,” the NTS chief maintained.
When asked how the NTS was faring after the confiscation of their servers, Khan said that despite several requests, the FBR had not returned their servers or given them access to the information.
He added that the FBR team that conducted the raid had a handwritten notification and made claims that were not related to the actual tax that the NTS had to file.
It is interesting to note that the findings of the FBR are consistent with the report presented by the Auditor General of Pakistan in 2016 and the audit conducted by the Securities and Exchange Commission of Pakistan, where both the bodies had found glaring financial irregularities and misappropriations.