FBR launches probe into Axact’s tax practices

KARACHI: Looks like the whistle blown by Declan Walsh’s investigative report in the New York Times in connection with the online businesses of Axact has opened a Pandora’s Box as one shocking development leads to another.

Now the Federal Board of Revenue (FBR) has set into motion a process of investigation into the alleged flouting of tax laws by Axact – a company that calls itself Pakistan’s biggest in terms of IT service provider.

A fresh disclosure shows that Axact committed evasion of tax on its exports of IT services worth millions of rupees during the period of 2009-2013.

According to FBR’s intelligence, Axact flouted the Income Tax Ordinance 2001 in an attempt to escape tax payments. In this connection, the FBR had referred the case for conducting an investigation to RTO Karachi early last year.

However, due to the sluggish pace at which the investigation was being carried out the total volume of tax evasion could not be unearthed.

The FBR spokesman says the Board has also reached a decision to audit the assets maintained by the company and the details regarding its tax payments. “The facts will be uncovered through independent investigation,” he added.

He said in order to obtain more records and documents, the in land intelligence of FBR has started working in coordination with the Federal Investigation Agency (FIA).

Axact chief executive, Shoaib Shaikh’s income tax records

According to sources, Shoaib Shaikh, the chief executive at Axact, paid only Rs22 in income tax in 2013, while in 2014 he paid Rs26.

FIA corporate cell has issued a notice to summon Shoaib Shaikh on Wednesday.

Meanwhile, it was also decided to put Shaikh's name on the Exit Control List (ECL).