ACC implicates 296 in ATM card and tax evasion rackets

Corruption: The Phuentsholing dungkhag court, which is already dealing with more than 40 cases of tax evasion and fronting, is expected to be flooded with another 274 cases related to the Automated Teller Machine (ATM) card racket and 22 cases of sales tax evasion.

Forwarded by the Anti-Corruption Commission (ACC), both cases are being reviewed by the Office of the Attorney General (OAG) for probable prosecution.

The report on tax evasion by 18 importers was forwarded to the OAG earlier this month. The commission’s findings revealed that 18 importers based in Thimphu had not declared their consignments worth Nu 2.114 million at the Regional Revenue and  Customs office’s entry gate in Phuentsholing, on November 21, 2014.

The sales tax evaded by them stands at Nu 115,188. The ACC, therefore, recommended the OAG to restitute Nu 905,740 to the state inclusive of application fines and penalties from 18 importers, who are charged for tax evasion.

The consignments were transported by two truck drivers from Phuentsholing to Thimphu. A jumbo-truck driver is charged with 16 counts of participation in an offence, and a DCM truck driver with 10 counts of the same offence.

The investigation established that the two drivers were not mere transporters for importers but agents with close relationships with inspectors and suppliers across the border capable of negotiating with inspectors to mis-declare the consignments they transport.

Two regional revenue and customs’ inspectors were also implicated with eight to 11 counts of offences of omission amounting to abuse of functions. The commission stated in the report that the two inspectors in the pretext of not being able to perform their duties diligently chose deliberately to omit their professional mandate.

The ACC began investigation after receiving an anonymous complaint alleging that a Jumbo truck and DCM were transporting goods from Phuentsholing to Thimphu without declaring taxes at the point of entry on November 21, 2014. During the course of investigation, the commission interrogated 29 individuals and two persons were detained and released on execution of bond.

The investigation established that the importers ordered their goods from Delhi, Siliguri and Jaigaon, India. The goods were sent by the suppliers and transported by the Jumbo-truck driver from Jaigaon to Thimphu. Having worked closely, the driver in question had gained the confidence of the importers who then requested him to declare their goods and pay taxes.

As a regular transporter, the driver also knew inspectors and developed close acquaintances through which he knew their duty rosters, enabling him to negotiate with them for consideration.

The commission viewed that the two trucks were used as an instrument of crime to ferry undeclared goods and seized the two vehicles along with the consignments.

The investigation confirmed rampant occurrences of trade fraud in Phuentsholing, which is the main trade gateway of Bhutan and accounts for about 80 to 90 percent of trade into the country.  Importers and transporters took advantage of it to enrich themselves illicitly through mis-declaration of imported goods. “Further inspectors appointed to counter such menace did not exercise due diligence,” the ACC report states.

Meanwhile, the ACC also implicated a non-Bhutanese for active commercial bribery for repatriation of Indian Currency (IC) amounting to INR 106.304 million by using 320 ATM cards belonging to different Bhutanese individuals from 2012 to 2015.

Along with the accused, the commission also recommended the OAG to charge 273 Bhutanese individuals who sold their ATM cards for Nu 2,000 each. They were charged for passive commercial bribery and aiding and abetting the offences.

The accused used ATM cards of Bank of Bhutan Ltd (BoB) and Druk Punjab National Bank (DPNB) and withdrew INR from India.

OAG officials said that both cases will be registered with the court soon.

Rinzin Wangchuk

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