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Vol 2 Issue No. 20

Karachi, tue June 03 - Mon June 09, 2014


Regd. No, Mc-1381


There is a need for providing stateof-the-art facilities at dry ports to ensure prompt delivery of export consignments and enable the exporters to reap optimum benefits, says President Mamnoon. | See PAge 05 | RuNNINg 24/7

Pakistan International Airlines, Shaheen International Airlines and Air Blue have not yet paid their sales tax worth over one billion rupees for the last three years KARACHI


Current closure of border routes on weekends is not favourable for promotion of trade and the ministry will try to keep Sust check post open for whole year, says Khurram Dastgir. | See PAge 04 | ActINg WAtcHdOg

PAC vigilantly surveys matters ranging from government’s account statement to expenditures and profits of state corporations, says Abdul Mannan. | See PAge 06 | SeIzINg cONtRABANdS

DI&I-Customs, Karachi seizes smuggled goods worth Rs438 million including 385,000 litres of Iranian diesel, air-conditioners, vehicles, generators and tyres in three months, says Director I&I. | See PAge 04 |


ederal Board of Revenue may suffer loss of over one billion rupees due to clash between two major entities of the state, Pakistan Customs and Pakistan International Airlines (PIA) over non-payment of due sales tax. Sources in Pakistan Customs informed Customs Today that the three airlines in-

cluding Pakistan International Airlines, Shaheen International Airlines and AirBlue have not yet paid their sales tax worth over one billion rupees for the last three years. Both the national institutions, Pakistan Customs and PIA, have moved court for using their legitimate right to defend their viewpoints. In the fresh development, the Sindh High Court has Lixed June 18, 2014 as the date of hearing the case. While the other two airlines i.e. Shaheen International Airlines and Air Blue have already taken stay-order from the court. On one hand, the national carrier was of the view that the air-planes were purchased on lease and no importation has been done in this regard, so no sales tax can be implemented.

On the other hand, Pakistan Customs was of the view that whatever comes from sea, air or land routes must fall in category of imports and the planes owned by those airline companies were imported from United Kingdom, Bulgaria and Canada. Sources further told this scribe that the customs duty has already been exempted on importation of machinery under SRO 575. However, the airline companies should pay their sales tax for the remaining years, as they had paid the similar taxes until 2010. “FBR is facing a shortfall of over one billion rupees due to the non-payment of sales tax by the airline companies. Pakistan Customs will succeed to recover the said amount”, the sources added. 

Price Rs. 50.00



JUNE 03 - JUNE 09, 2014

extra St on power, gas bills likely to go up

ISLAMABAD: Government is considering to double ‘extra sales tax’ from 5 to 10 percent on all unregistered electricity and gas consumers having industrial or commercial connections in budget 2014-15. The extra sales tax on electricity and gas connections was announced to force the unregistered persons to get registered with the sales tax department. However, the move failed to yield the desired results as the unregistered persons continued to pay tax instead of getting registered.

he gate-out time of the transit consignments after off-loading at the ports has been reduced by half a time after the introduction ofWeb Based One Customs (WeBOC), an automated system for transit trade. This was claimed by a senior official of the Directorate ofTransitTrade while talking to CustomsToday. He said that the consignments go through examination and gate-out within three days. Earlier, before the introduction ofWeBOC automated system it could take up to 12 days for the same process, the official. Commenting on the pilferage of the containers en-route Super Highway and Chaman, the Pakistan Customs official said that the cases of theft and pilferage of the containers have been reduced dramatically due to strict surveillance on different check posts established at Super Highway, Chaman and other routes of transit trade. Giving the statistics, the official informed that out of over 26,000 containers/consignments in the last year, only 150 incidents of pilferage were reported at Super Highway and Chaman routes, which shows dramatic decrease in pilferage incidents. —CT Report


FBR asks 73 car dealers to declare their assets BR has issued notices to at least 73 car dealers in Lahore asking them to declare their assets by June 10. Sources said that FBR has issued notices following preparation of a special report disclosing that the motor car dealers were possessing extraordinary assets. However, they were mis-declaring their incomes hereby evading huge taxes inflicting heavy losses on national exchequer. They said that the Lahore Regional Tax Office I issued the notice to 73 dealers of motor car in Johar Town, Faisal Town and model Town in the first turn. Sources further disclosed that in the next turn, dealers at jail Road and other parts of the city would be issued notices asking them the same i.e. to declare their assets. —CT Report


Chief Collector asked to foil POL smuggling ecretary Law and Procedure Fazl-eSamad through a letter has asked the Chief Collector of Customs Enforcement-South Muhammad Nazim Saleem to formulate schedule and strategy for collection of duties/taxes through auction of seized petrol and diesel. In the letter, Secretary Law and Procedure further advised the Chief Collector of Enforcement-South to make effective measures in order to thwart and foil smuggling of petroleum products in order to generate revenue in legal way. —CT Report


Mcc Appraisement-east begins examination through iPads, tablets

KICT mishandles examination area operations: Importers facing problems

Initially, two tablet PCs have been handed over to examining officials in order to assess and examine the GDs from examination area and send the final report KARACAHI



odel Customs Collectorate of AppraisementEast has also introduced the latest technology in the examination area of Pakistan International Containers Terminal (PICT) for rapid completion of examination reports. Deputy Collector Ataullah Shabbir of MCC Appraisement-East has informed Customs Today that a pilot project in examining the Goods Declarations (GDs) through iPads and tablet PCs was initiated at PICT from Monday, May 26. “Initially, two tablet PCs have been handed over to examining ofLicials in order to assess and examine the GDs from examination area and send the Linal report from the area after completing the entire process,” the Deputy Collector added. Terming it a positive move Attaullah Shabbir said that it would deLinitely have a positive impact on trade and cost of doing business would certainly be improved by the initiative. He further elaborated that the main objective of introduction of latest technology at PICT was saving precious time of traders and clearing agents by enhancing the efLiciency of Customs ofLicials. Deputy Collector informed this scribe that every examination at PICT would be conducted through iPads and tablet PCs soon. It may be mentioned here that a meeting in this regard was held at

Introduction of latest technology at PIct aims at saving precious time of traders and clearing agents by enhancing the efficiency of customs officials the Collectorate of MCC Appraisement-East being chaired by Collector Najeeb-ur-Rehman Abbasi in which the decision regarding the introduction of iPads and tablet PCs at PICT was Linalized. It is pertinent to mention here

he importers, traders and clearing agents have expressed their deep concerns and anxiety over the delay in grounding the containers/consignments for examination at Karachi International ContainersTerminal (KICT). The importers while sharing their views with Customs Today said that they were facing immense problems in examination of their consignments which were laying at KICT for last three to four days. They informed this scribe that the shortage of labourer staff at the KICT terminal was creating hindrance in clearing their consignments and the delay compelled them to pay extra amount in share of demurrage charges on clearing on their consignments. Sources at the terminal informed Customs Today that the KICT administration has handed over the contract of labourer staff to a new company, which was a main reason of the nuisance. “The newly introduced contract company has shortage of man-power which is ultimately putting adverse effects on the process of examination and the back-log of the consignments has been piled up at KICT examination area,” the sources revealed. When contacted, the Collector of MCC Appraisement-West Muhammad Saleem has confirmed that the KICT administration has given the contract of the labourers at KICT to a new company and the said company took over the operations in examination area from last Monday. He further said that the process of clearance of the consignments at examination area of KICT has been improving since Thursday morning and it will further improve with the passage of time. To a query, the Collector further said that Pakistan Customs is aware of the problems in examination of consignments and has been discussing the matter with the KICT authorities. —CT Report


— Exclusive Customs Today photo

WeBOC halves gate-out time of ATT consignments

that the Model Customs Collectorate of Appraisement-West has already initiated the said exercise at KICT, where around 20 examiners were using iPads and tablet PCs for assessing and examining the Goods Declarations (GDs). 

Rs308m tax evasion: Royal Packages booked KARACHI

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he Research and Development (R&D) Section of Model Customs Collectorate (MCC) of Appraisement-East has detected a case of huge tax evasion of Rs308million by importer M/s Royal Packages (Pvt) Ltd on misusing the SRO811(I)/2009. Sources in R&D Section informed Customs Today that the 12 consignments of polythene and polypropylene, imported by M/s Royal Packages (Pvt) Ltd have been detained by the Collectorate after detection of huge revenue scam. Subsequently, when the R&D Section conducted inquiries and phys-

ical inspection of the consignments found that the M/s Royal Packages (Pvt) Ltd has no facility of manufacturing mono-Lilament yarn and net cloth. It further said that the misuse of exemption has been established by the fact that the consignments at the port were intercepted by R&D Section and sensing it, the importer did not claim beneLit of SRO in the GD Liled subsequently. “The M/s Royal Packages (Pvt) Ltd, have so far availed exemption of duty/taxes to the tune of Rs308million on consignments imported through this Collectorate since 01-01-2012”, it added. The sources further claimed that the necessary proceedings have been initiated for violation of the relevant provisions of the Customs Act, 1969 and massive evasion of duty/taxes. Further progress with regard

Twelve consignments of polythene and polypropylene have been detained

to the said importer and other such entities involved in this case will be made available to the Board in due course. It further apprised this scribe that the Collector MCC-Appraisement (East) Najeebur-Rehman Abbasi has written a letter to Member Customs, Nisar Muhammad Ali that various importers-cummanufacturers of polythene and polypropylene were misusing concessionary treatment envisaged in SRO811(I)/2009, adding that the said SRO was only granting exemption from Customs duty on import of polythene and polypropylene for manufacture of mono-Lilament yarn and net cloth. The letter further stated that the sales tax exemption was also available which was subsequently withdrawn vide SRO152(I)/2013.


JUNE 03 - JUNE 09, 2014

ANf arrests smugglers, seizes heroin, charas, opium

LAHORE: Anti Narcotics Force Lahore has arrested smugglers recovering heroin, charas and opium. ANF intercepted a car near Doctors Hospital, Canal Road recovering 3 kg heroin while another car was intercepted near Abdullah Travels bus stand, Band Road having 2 kg heroin concealed in the secret cavities of the car. Two men each were arrested in the two cases. ANF team intercepted a man at Allama Iqbal International Airport and recovered 2.02 kg heroin concealed in his trolley bag. The accused was to travel to Saudi Arabia.

9inspectors,28senior preventiveofficers promoted odel Customs Collectorate of Preventive has promoted nine Inspectors of Preventive Service (BS-16), to Superintendents of Preventive Service (BS-16) and 28 Senior Preventive Officers (BS-16) to Inspectors Preventive Service (BS-16). According to a notification numbered 0934-C-III/2014, the Customs officials who got promotion from inspectors to superintendents include Ahmed Kabir, Arif Munir, Muhammad Farooq, Zarrar Bin Azmat, Sarfaraz-ul-Hassan, Sahib Zar Khan, Abdul Ghaffar, Shahbaz Khan and Tanveer Ahmed Butt. The Customs officials who got promotion from senior officers to inspectors include Mansoor-ul Hassan Farooqi, Syed Khalid Samar, Zahid Hussain, Ghulam Sarwar Khan, Qadeer Zareef, Ansar Ata Ansar, Owais-ur-Rehman, Syed Tariq Ahmed, Gul Sher Khan, Zafar Iqbal, Jameel Ahmed, Syed Raghib Hasnain Jaffery, Irfan Ali Kalhoro, Pervez Iqbal, Zulfiqar Ali Shaikh, Khayyam Ali Soomro, Shafqat Raza Cheema, Salahuddin Wazir, Syed Muzaffar Shah, Athar Munir, Naeemullah Khan, Nasir Hameed Khan, Abrar Ahmed, Irfan Ahmed, Javed Afzal, Imran Tahir Qureshi, Azhar Hussain Khan and Mumtaz Hussain Khan. —CT Report


cut in duties on air guns demanded mporters of air guns have demanded reduction in customs duty and other taxes on import of air guns. At present, govt levies 30% customs duty, 20% regulatory duty and 17 % sales tax and withholding tax. It comes to around 90% of duties and taxes which is on very higher side, said Javed Malik a representative of air guns and accessories importers of Pakistan. —CT Report


416 Nato vehicles transported to Afghanistan in a month KARACHI

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irectorate General of Transit Trade has cleared 416 vehicles for Afghan National Security Forces (ANSF) by air under Customs General Order (CGO) No 01 of 2014, issued by Government of Pakistan through Revenue Division. FBR issued the order on April 28 on one-time basis for transit of US/ISAF/NATO cargo to Afghanistan meant for the country’s security through Jinnah International Airport, Karachi. Additional Director of Directorate of Transit Trade-FBR, Chaudhry Muhammad Javed informed Customs Today that the authorities concerned of Pakistan Customs with the approval of Federal Ministry of Defence started the Multi Modal Transit Operation for the transportation of military vehicles through Jinnah airport from May 1, 2014. Additional Director Javed informed this scribe that the Lirst batch consisted of 416 vehicles to be transported to Afghanistan during one month. The CGO will continue to effect till the completion of the entire process of transportation of total 1628 vehicles, he added. “The chartered planes visited at Jinnah International Airport twice a week and will continue the same exercise till the transportation of total vehicles,” he maintained. It is pertinent to mention here that Karachi Port is the only port of entry and Jinnah International Airport is the only port of exit for this cargo. 

Nato cargo: FBR delegates special powers to additional collector ISLAMABAD

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ederal Board of Revenue (FBR) has allowed additional collector of the port of exit to extend stipulated period for three months to depart break bulk Nato/ISAF cargos. According to details, the FBR amended to the

Customs General Order (CGO) 10, 2012 through notiLication CNo 1 (12)T&BT/2014. Earlier, the board through CGO-10/2012 directed that the cargo in transit shall cross the border or depart from the country as the case may be, within 15 days of clearance from the port of entry. In circumstances beyond the control of the carrier, the additional collector of customs of the

port of entry may, upon the application of the authorised carrier and after satisfying himself, extend stipulated period for not more than 30 days. Now, the FBR has made amendments to and allowed additional collector of the port of exit to extend the stipulated period for not more than 90 days to depart break bulk Nato/ISAF cargos.


JUNE 03 - JUNE 09, 2014

fBR denies tax waiver to Najam Sethi

ISLAMABAD: Federal Board of Revenue has clarified that no tax waiver was granted by the government to PCB Chairman Najam Sethi. An FBR statement read, “It has been clarified that income tax amounting to Rs10,625,133 was imposed on Najam Sethi for the Tax Year 2009. On an appeal filed by the taxpayer, Commissioner Appeals Lahore cancelled the order creating the tax demand. Income Tax Dept Lahore has assailed the order of the Commissioner Appeals by filing an appeal before the Appellate Tribunal Inland Revenue for restoration of the tax imposed.”

OfficialsproposeFBRto introducetwoslabsfor importduties fficials of Pakistan Customs have put forward some recommendations before Federal Board of Revenue Chairman Tariq Bajwa and Member Customs Nisar Muhammad Ali in order to eliminate corruption, tax evasion, mis-declaration and under-invoicing from the customs. According to sources, officers have recommended the introduction of two slabs for duties/taxes one for commercial imports and other for industrial imports with 25 per cent and 5 per cent duties/taxes to eliminate the discretionary powers of Customs officers, adding that this step will eliminate the SRO culture from the country. They were of the view that the introduction of two slabs in customs duty will increase 25 per cent more duty, 20 per cent more sales tax and 15 per cent income tax in transparent way. Furthermore, they have rejected the phasewise withdrawal of SROs by FBR. “The introduction of two individual slabs will eliminate under-invoicing and fraud from the department and facilitate industry to grow-up in transparent manner,” they added. They further suggested the FBR authorities concerned to re-structure the tax network in light of the present circumstances and that the Board may be divided in “direct tax” and “indirect tax” to control the department in efficient manner. —CT Report


LahoreTaxofficescollect Rs260bin10months ederal Board of Revenue has collected Rs 260 billion on account of income tax, sales tax and excise duty in 10 months of the current FiscalYear 2013-14 in Lahore region, official sources said. LargeTaxpayers Unit, RegionalTax office I and II collectively gathered the amount under heads of sales tax, income tax and federal excise duty in period from July 2013 to April 2014. An amount of Rs 98 billion was amassed on account of sales tax; Rs 43 billion was collected as income tax; federal and excise duty collection reached Rs 13 billion. In the previous fiscal year Lahore tax offices collected Rs 82 billion on account of sales tax; Rs 35 billion as income tax; and Rs 12 billion as federal excise duty. FBR's overall tax collection target has been revised from Rs 2,475 billion to Rs 2270 which will enable Lahore’s tax offices to achieve their respective targets. —CT Report


customs seizes goods worth Rs438m: Margoob KARACHI

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he Directorate General of Customs Intelligence and Investigation (I&I)-FBR Karachi has seized huge quantity of smuggled goods including 385,000liters of Iranian diesel, air-conditioners, vehicles, mobile phones, laptops, plastic granules,

BR has only been able to recover Rs 12,500 out of the tax liabilities worth Rs 10 million by seizing accounts of Moeez Steel Industry located at the Momin Pura Road. Sources said that RegionalTax Office team raided Askari Bank Limited in order to recover tax liabilities of Moeez Steel Industry for the tax year 2009, 2010 and 2012 amounting to Rs 10 million. As it turned out, the bank accounts barely had any credit to be seized.The team could recover only Rs 12,500 due to insufficient funds in the company’s account, the sources added. —CT Report


Port Muhammad Bin Qasim, adding that 36 cases amounting Rs 796 million have been unearthed by the Directorate during this period. Siddiqui further informed the media that most of the tax evasion cases were related to misusing of SRO 1125, which allows concessions in taxes to the industries. “Revenue amounting to Rs63million was deposited into the national exchequer during the same period”, he added. Speaking at the occasion, Ad-


M HAyAt ustoms Intelligence has thwarted an attempt to smuggle 606 bags of Polyethylene (plastic dana) under Arms Cover, having value worth Rs 3.5 million. The levy able duties/taxes were Rs 1.8 million. The bags were being smuggled from Quetta to Lahore. According to a spokesman of Customs Directorate of Intelligence and Investigation, Faisalabad, the anti smuggling squads of Multan, Dera Ghazi Khan and MCC Multan, on receiving a tip-off intercepted a truck loaded with 15150 kg Polyethylene and stopped it on road for search. Unidentified persons stepped out of four cars and blocked the road while resorting to heavy firing with sophisticated weapons. They snatched the loaded truck and drove it to some unidentified destination. 


Adjudication-IIdecides 685casesin10months — Exclusive Customs Today photo

scrap, generators and tires worth more than Rs 438 million during the last three months through a systematic and well-coordinated operation against the smuggling of goods and tax evasion on the instructions of Lutfullah Virk, Director General, Customs Intelligence & Investigation-FBR, Islamabad. This was stated by Director Customs Intelligence & Investigation-FBR, Karachi, Asif Margoob

nals have been arrested in those particular cases of smuggling goods. He further informed the media that the Anti-Smuggling Organization of the Directorate has also recovered duty and taxes more than Rs 103 million during the last three months. It was further disclosed by the Director, Asif Margoob Siddiqui that the cases of evasion of duty/taxes were also detected at Karachi Port as well as

ditional Director Nadeem Ahsan said that the work of Pakistan Customs was to determine the consignments, not to survey it. He further made it clear that the SRO1125 applies on industrial consignments instead of commercial users. “We are committed to implement SRO regime in its true spirit and detect tax evasion in order to save national kitty”, he maintained. 

he Collectorate of Customs Adjudication-II has decided 685 cases during the period of 10 months from July 2013 to May 2014 and recovered duty/taxes of worth Rs47.7million from different importers. According to the details, the Collectorate of Customs AdjudicationII has received Contravention Reports (CRs) of worth Rs176.4 million from the Model Customs Collectorate of Appraisement-East during the said period. —CT Report


dastgir nods at 24/7 functioning of Sust Post ISLAMABAD

Only Rs 12,500 recovered from Moeez Steel

Siddiqui during a press conference held at Regional OfLice here on Thursday. Additional Directors Customs Intelligence Feroze Alam Junejo, Nadeem Ahsan and Deputy Director Dr Muhammad Ahsan Khan were also present on the occasion. Speaking at the press conference, Director Customs Intelligence and Investigation admitted the fact that the real culprits are released from courts due to weak prosecution system. Siddiqui further claimed that 40 to 50 crimi-

Customs foils bid to smuggle over 15000kg polythene

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ommerce Minister Khurram Dastgir has expressed government’s aspiration for 24/7 trade at Pak-China border. While talking to a delegation of Gilgit Baltistan Chambers of Commerce and Industry, which called on the Minister to express their concerns over border management at the Pak-China border, he recognised the fact that current closure of border routes on weekends is not favourable for promotion of trade. Sust Post at the Pak-China bor-

der stays closed for four months every year apart from the public holidays of both countries. In addition to this, Saturdays and Sundays also see the continual closure of the post. Business community of Gilgit Baltistan complained that these holidays are hampering the free Llow of trading vehicles and long queues of trucks are seen at the border by the end of every week. The closure puts a substantial burden on the traders as it results in enhancing the freight costs. They demanded that the closure of border crossings on weekends is unjustiLied which results in retardation of trade and discourages the traders to take further

commercial pursuits. The minister said that trade facilitation is the prime responsibility of Ministry of Commerce and whenever and wherever an issue emerges which obstructs the free Llow of trade, the ministry will swiftly respond to remove the hurdles. The Minister apprised the businessmen and traders that concerns were already communicated to the Advisor to Finance Ministry and on the directions of the Advisor, the issue is put on the agenda of next Councillors meeting scheduled to be held on 10th June. There is great hope that the outcome of that meeting will bring respite to the traders, he said.


JUNE 03 - JUNE 09, 2014

Beauty of location compels Omani government to turn it into tourist resort

MUSCAT: Oman is seeking bids from consultants for a contract to redevelop Sultan Qaboos Port in Muscat into an integrated tourism hub. The government plans to convert the existing commercial port into a tourism port due to its beautiful landscape. Sultan Qaboos Port will officially be opened as a tourist destination from the beginning of 2015. It will continue to receive a limited number of commercial vessels and ships.

Bajwa asked to take action against 1200 tax evading officials ISLAMABAD

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President underlines dry ports role to boost exports ISLAMABAD

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P inance Minister Senator Ishaq Dar took serious notice of a news item published in a section of press stating that 1200 out of 1743 FBR officials have not submitted their income tax returns. "The Finance Minister has directed Chairman FBR to verify the veracity of the report and if found correct, the defaulting officers should be directed to file their returns by 10th June subject to existing rules", says a PR issued here Thursday. The statement quoted Ishaq Dar as saying that failing to comply with the directions given by the Finance Minister, punitive action should be taken against the non-complaint officers and their performance allowance must be stopped. The Finance Minister added that the government will not allow evasion of tax declaration by government officials who ought to set an example for ordinary citizens. 


resident Mamnoon Hussain has emphasized the need for providing state-of-the-art and best possible facilities to exporters at Dry Ports to ensure prompt delivery of export consignments and enable the exporters reap optimum beneLits from the trade concessions offered by the international community to the country. The President was talking to a delegation of Sialkot Dry Port Trust led by Ishaque Butt Chairman, Sialkot Dry Port Trust and All Pakistan Dry Ports Association here at Aiwn-eSadr. The president pointed out that timely delivery of export orders had become essential feature of the global trade and urged for more vigorous steps and initiatives to boost the country’s exports. Besides Ishaque Butt, the delegation included Multan Dry Port Trust Chairman Khawaja Muhammad Younus, SCCI Committee on Small Industrial Estates/ EPZ Chairman Dr Mohammad Aslam Dar and All Pakistan Dry Ports Association Secretary General Mohammad Khalid Butt. President Mamnoon Hussain underlined the important role of the business community and exporters in the ongoing economic turnaround of the country and called upon them to step up efforts and complement governments measures to fully exploit the Geo-strategic location of the

country. Commenting on various challenges confronted by the business community, the President said that the government was fully alive to the problems and concerns of the businessmen and all possible steps were being taken to provide a conducive environment for robust trade and investment in the country. Referring to the recent turnaround in various sectors of the economy, the President said that due to business-friendly policies of the government, economic indicators were showing positive trends and the conLidence of both domestic and foreign investors had been restored. Highlighting the important role of Dry Ports, the President observed that Sialkot Dry Port Trust was predominantly engaged in exports and appreciated the services rendered by

Sialkot Dry Port Trust, being cargo handler and freight forwarder has important role to play in the export promotion and it must take advantage of automation of Customs processes to provide efficient services to its clients

country’s exporters by earning valuable foreign exchange for the country. Mamnoon Hussain said that Sialkot Dry Port Trust, being cargo handler and freight forwarder had important role to play in the export promotion and urged SDPT to take advantage of automation of Customs processes and advancement in telecommunication to improve and provide efLicient and competitive services to its clients. The President also assured all out support to the Sialkot Dry Port Trust in performance of its functions aimed at export promotion in the country. The delegation thanked the President for meeting and assured that SDPT would continue making its positive contributions towards boosting countrys exports and developing national economy. 




JUNE 03 - JUNE 09, 2014

PAc vigilantly surveys matters ranging from govt’s account statements to expenditures and profits of state corporations ISLAMABAD



have rewarded him with so many important responsibilities in different federal committees. He pointed out that the PAC vigilantly surveys matters ranging from government’s account statement to expenditures and profits of state corporations. “Apart from these responsibilities, the committee also takes care of public trading and manufacturing enterprises along with losses and profits of other government projects,” he added. Mian Abdul Mannan revealed that according to NA Rule 203 (4), the committee was authorised to inquire into any superfluous expenditures by government or any institution. While signifying the importance of the Public Accounts Committee, the PML-N lawmaker maintained that the committee members are representing different political parties in the National Assembly and are true public representatives. “They are striving hard to make the committee more effective in the light of multiple opinions while playing their role in running the government affairs in smooth and transparent manner,” he elaborated. He said that thanked to Allah Almighty the country economy was progressing towards prosperity due to “what he called” peoplefriendly policies of the

he all-powerful Public Accounts Committee of the National Assembly acts as a watchdog to keep an eye on government accounts and ensure transparent utilisation of each and every penny of the public exchequer. The PAC monitors corruption and anomalies in the affairs of different ministries and seeks explanation from the quarters concerned whenever and wherever detects any irregularity. Public Accounts Committee member MNA Mian Abdul Mannan expressed the views during an exclusive chat with Customs Today here. The PML-N lawmaker informed that the PAC was acting as catalyst for the development and strengthening of government institutions and ministries. Mian Abdul Mannan was elected as member National Assembly from NA-83 Faisalabad. He is member Public Accounts Committee (PAC), Chairman Parliamentary Affairs Committee, Member NA Committee on Industry and Production, Member NA Committee on Finance and Central President All-Pakistan Traders Association. Mian Abdul Mannan belongs to a business family and traders considered him as their voice. It is his sheer honNA Rule 203 (4) esty and dediauthorizes the committee cation that

to inquire into any superfluous expenditures by govt or any institution

PML-N government, adding that the government sagacious policies had revived confidence of the foreign investors. Mian Abdul Mannan said that appreciation in the value of rupee against US dollar was a great achievement of the government, saying that strengthening of rupee would benefit both the importers and exporters. The PAC member claimed that $1.5 billion given by the Kingdom of Saudi Arabia stood testimony to the fact about the kingdom’s trust in the person of Prime Minister Nawaz Sharif. “Tremendous efforts are underway with the cooperation of friendly countries to eliminate electricity crisis,” he informed, adding that the government had promised the people of Pakistan that it would do away with darkness in its five years tenure and there would be prosperity from Khyber to Karachi. While extending his conversation, the PML-N lawmaker claimed that the government must provide maximum relief to the common man in upcoming budget since it was their prosperity that would bring about development and prosperity in country. Counting the government successes at different fronts, Mian Abdul Manan boasted that Pakistan’s international financial credibility had increased due to PM Nawaz

Sharif as now foreigners were ready to invest in Pakistan. “Apart from this the forex reserves have crossed $12.6 billion while GSP Plus status will open up new vistas of development and prosperity in the country,” he underlined, adding that it was the government priority to enhance exports and had asked the friendly countries for trade instead of aid. He expressed the hope that GSP Plus status would boost Pakistan’s textile industry and would result in windfall benefits for the industry due to better access to EU market. Similarly, the Chinese company Shandong Ruyi Group will invest 2 billion dollars in the textile sector which will besides others benefits will create thousands of job opportunities, the PAC member revealed, adding that in the same way auction of 3G and 4G technology would create one million new jobs and had generate $1.5 billion for the national exchequer. Mian Abdul Manan declared that the PML-N under the leadership of Mian Nawaz Sharif had put the country on the path to progress and prosperity and the time was not far off when the nation would stand tall in the comity of nations. The PML-N will make Pakistan an economic super power after having made it a nuclear power, he concluded. 

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— Exclusive Customs Today photo


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he intention to increase tax burden on wealthy and influential segments of the society can be executed by FBR only if the government demonstrates its political will to increase the share of direct taxes in the upcoming budget. The share of direct taxes stands at around 38 per cent while a major chunk of 62 per cent is collected through indirect taxes in Pakistan.The indirect taxes are considered as regressive and unjustified since it increases tax burden on poor more than those who earned more. If this imbalance is struck in major way by bringing down the share of indirect taxes close to 50 per cent it will definitely push up the demand for increasing share of direct taxes in overall tax collection made by FBR. The upcoming budget can prove a milestone in achieving the desired objective on the basis of this argument‘when you earn more, you should pay more’. It is generally believed and practiced in the modern world that wealthy people pay taxes and the government spends on the welfare of the poor. But it’s all together different in Pakistan where poor pay taxes and with the help of this money the status of influential and rich is protected. At this juncture, the government is again assigning highly challenging tax collection target of Rs 2,810 billion to the FBR in the upcoming budget against twice revised tax collection estimates of Rs 2,275 billion during the outgoing fiscal year, ending on June 30, 2014. The proposed budgetary measures are bringing retailers into the tax net, ensuring effective enforcement for collectingWithholding Tax, increasing tax burden on non filers and non registered individuals and companies, increasing tax rates for banking sector in the wake of higher profits, on cement, cigarettes and many other products. However, the government must not increase tax burden on items of daily usage such as vegetables, fruits, edible oil, etc. The government is also considering imposing regulatory duty on luxury items.The proposed tax measures included withdrawal of tax exemptions, abolishing of SROs and administrative measures will help the FBR to achieve over 25 per cent growth in the next fiscal year for achieving the fixed target of Rs 2,810 billion.The FBR will have to collect Rs 635 billion in order to display its desired target in the next budget.With nominal growth (GDP growth of 5.1 per cent and inflation target of 8 per cent) plus elasticity of taxes, FBR’s revenue could grow up to Rs 2,625 billion by adding up Rs 350 billion into the revised tax collection of Rs 2275 billion. So remaining 285 billion will have to be collected through different tax measures and administrative steps. It is high time to correct structural and basic weaknesses of FBR’s taxation system by devising rules and simplifying procedures with the aim to facilitate genuine taxpayers and apprehend the tax dodgers. Any effort to maintain status quo is bound to fail as we should not waste this precious time and set the right direction that can stimulate economic activities in months and years ahead. 

development expenditures in new budget ISLAMABAD



espite increasing size of development outlay in the upcoming budget, it is still falling behind among the other two Ds i.e. debt servicing and defence as major chunk of tax revenues are being consumed by these two heads of expenditures every year. This status quo can only be broken by increased mobilization of tax revenues in our country. In country of over 180 million populations, it is matter of shame that the number of return Lilers is below 0.9 million in the outgoing Liscal year and overall tax-toGDP ratio has fallen around 8.5 per cent in 2013-14. On macroeconomic front, the government has Lixed the GDP growth target at 5.1 per cent for the next Liscal year. The efforts will be made to restrict inLlation at 8 per cent. With development outlay of Rs 1,310 billion both for federal and four provincial governments in the budget 2014-15, the PML (N) led regime has made efforts setting the pace for achieving the goal of prosperity through improved economic activities. But it requires effective utilization of al-

located funds as almost half of every allocated money of Rs 100 is wasted in shape of leakages. Such loopholes need to be plugged out to maximize the beneLits of hard earned taxpayers’ money. As the focus of development is shifting towards provinces in the aftermath of 18th Constitutional amendment, the increased funding of development outlay consists of provincial share with an increased size of Rs 650 billion in the budget. The National Economic Council approved the Pakistan Vision 2025. Although it’s a well written document but as always the issue in Pakistan is implementation. In a positive development, the NEC approved a regular monitoring mechanism to be established in Planning Commission with the mandate to translate the Vision into reality through a Performance Delivery Unit against key performance indicators. NEC also approved the allocations for Diamer Bhasha Dam, Karachi Coastal Power Project, Dasu Hydroelectric power project, Neelum Jehlum hydroelectric power project, Chashma nuclear power project, Jamshoro power project, Tarbela extension IV project, Nandipur power project, Chichon-ki-Malyan power project, Gomal Zam project, Kurram Tangi Dam and Golan Gol hydroelectric power project.

There is need to utilize every penny judiciously in order to create positive impact of spending

Infrastructure projects including Lahore-Karachi Motorway, HasanabdalHavelian-Mansehra Road project, Peshawar Northern Bypass, Raikot-Islamabad project, Gawadar Airport, Gawadar Free Economic Zone and construction of Jetty and infrastructure development at Gaddani Power Park also received approval of the NEC. Feasibility study for construction of Havelian-Raikot railway line was also approved. The land acquisition cost of the Lahore-Karachi Motorway stands at Rs 53 billion of which 25.5 billion have already been released. All these development projects are good omen for the country and for the nation but there is need to utilize every penny judiciously in order to create positive impact of development spending. There is a criticism that what was the need of Vision 2025 when Pakistan is under the IMF program for three years and then two year monitoring in the aftermath of completion of Fund program even if Islamabad opted to say goodbye to the IMF. The Planning Commission high ups argued that at least there should be any direction on long term basis and the government should move ahead to implement its vision instead of walking around in vision less manner.


JUNE 03 - JUNE 09, 2014


transit consignment with concealed liquor gets busted by Saudi customs

RIYADH: Customs officers in Saudi Arabia have thwarted an attempt to smuggle 16,984 bottles of liquor (Vodka). The liquor was hidden in a consignment of mango and pomegranate coming from Bahrain and transiting through Saudi Arabia. The truck carrying fruit was heading to another neighbouring country. During the routine procedures at the border the customs officer suspected something was wrong. A thorough search of the truck revealed the existence of the liquor bottles concealed in the load.

Raise in taxes on real estate, stock market sectors imminent ISLAMABAD


collector Qurban Ali assures exporters of refunds soon



WRIte tO uS yOuR gRIeVANceS: Through cuStOMS tOdAy platform HeLP deSK, now you have chance to dIRectLy write your problems to top govt. functionaries. If you have any grievances, queries, questions or suggestions, you can write in this section as it provides easiest access to you to approach Customs and Revenue authorities. WHO can write in this section? Importers & Exporters, Customs Agents, Chambers of Commerce, Trade Associations and Customs Officers tO WHOM you can write? Honourable PM, Minister/Secretary for Finance & Revenue, Minister/Secretary for Ports and Shipping, FBR Chairman, Member Customs and Chairperson Senate/National Assembly Standing Committee on Finance & Revenue. Send your letters at:


odel Customs Collectorate Sialkot’s Collector Qurban Ali Khan has assured that all the prolonged perturbing problems of Sialkot’s business community would be solved on priority besides ensuring an early end to the prolonged pendency of the rebate payments claims as well. He said this while addressing an important meeting of Sialkot’s leading exporters held at the Sialkot Dry Port Trust. The meeting was jointly organised by Pakistan Customs and Sialkot Dry Port Trust to Lind out the communication gap amongst the stakeholders including the exporters, importers, cargo and customs clearing agents and the authorities concerned. As many as 22,801 rebate payment claims of Sialkot-based exporters worth of Rs 1.645 billion have been lying pending at Model Customs Collectorate of Sialkot since long, while 17,309 cases of rebate payments worth Rs 1.148 billion have been disposed of by ensuring the payments to the claimants. The Collector pledged to ensure early clearance of prolonged pending rebate cases of Sialkot exporters, saying that pendency of such cases was being wiped out by Pakistan Customs in Sialkot. On the occasion, the Collector as-

— Exclusive Customs Today photo

ederal Government has decided to increase taxes on real estate business and stock market transactions in the next budget. Meanwhile, Widening of tax net by increasing the number of taxpayers through law making is under consideration in addition to introducing new tax slabs for salaried class. Sources in the finance ministry have said that no decision has been made in regard to reduction in the ratio of sales tax. Government has been mulling over increase in taxes on real estate and stock market sector in the next budget due to substantial development in the two domains. However, it is yet to be determined as to what shall be the proportion of such taxation. According to sources, Chambers of Commerce and Industries and trade associations from all over the country had insisted on levying taxes on the said sectors in their proposals for the Budget 2014-15. They added that the government was already in favour of such proposals. Sources added that in addition to the federal government the provincial governments including Punjab Government are also giving thoughts to proposals of raising land taxes. It is quite possible to be implemented in the upcoming budget, the sources added. Federal Government has also decided to raise 15 to 20 per cent salaries of government servants to provide ad hoc relief. However, no lift in their allowances is on cards. Meanwhile, up to 10 per cent raise in pensions for retired government servants is expected.The decision to provide ad hoc relief was taken only after calls for protests and demonstrations by the government servant organisations. Finance ministry maintained that due to stability in the value of US dollar and Rupee’s appreciation against it, inflation has been contained. 


sured to provide all the necessary facilities to the Sialkot-based exporters and importers besides removing hurdles in motivating them to do their business through Sialkot Dry Port and Sialkot International Airport, saying that the time was ripe to provide all the trade-related incentives to Sialkot's exporters, importers, cargo and customs clearing agents while also asking them to enhance the exports from Sialkot through Sialkot Dry Port and Sialkot International Airport. Qurban Ali Khan briefed the participants in detail on Pakistan Customs’ facilitation schemes including Duties and Taxes Remission on Ex-

ports, manufacturing bonds, private bonds, EOUs, EPZ and guarantee. He said that Federal Board of Revenue and Pakistan Customs were introducing the business-friendly policies for encouraging the business community to struggle hard for promoting the national exports with full devotion, dedication, enthusiasm and an atmosphere with peace of mind. The meeting was cautioned about the reduced exports from Sialkot Dry Port as the export volume remained Rs 88.04 billion during FY 2013-14 while it was to the tune of Rs 97.19 billion during the FY 2012-13 during ten months. A visible decline in exports from

Sialkot Dry Port was due to several reasons including the fact that the Sialkot-based exporters were preferably exporting their shipments from other dry ports of the country instead of Sialkot Dry Port. Export consignments from Sialkot worth of Rs 90 billion were forwarded from other dry ports and airports of the country instead. Chairman Sialkot Dry Port Trust Muhammad Ishaq Butt told the meeting that sincere efforts were being made to provide the maximum facilities to Sialkot's exporters and importers at the dry port. Addressing the meeting, Senior Vice President Sialkot Chamber of Commerce and Industry Mian Muhammad Anwar urged the immediate provision of the proper mechanism of WeBOC system at MCC Sialkot, saying that the systems had been launched almost a year ago, but it was not yet functional properly, due to which Sialkot’s business community was much perturbed. The participants also expressed grave concerns over the improper checking system of the export consignments by ANF. Chairman Pakistan Leather Garments Manufacturers and Exporters Association Mian Anwar, Ahmed ZulLiqar Hayyat, Irfanul Rehman Khan (Additional Collectors MCC Sialkot), Asdaq Afzaal, Farrukh Sharif, Shahid Malik (Deputy Collectors MCC Sialkot), Syed Karim Aadil and Shamas Wazir Khan (Assistant Collectors MCC Sialkot), leading exporters and, cargo and customs clearing agents also attended the meeting. 

Appeal to introduce iPads at PIct To, The Honourable Chairman, Federal Board of Revenue, Islamabad

signments on the spot after taking pictures and examining the consignments and sending those for assessment from the examination area. However, proper training is needed to make the examining staff more efficient in order to use the latest technologies. I recommended that Federal Board of Revenue must introduce the contemporary technology completely and immediately in the other terminal i.e. Pakistan International Containers Terminal, so that the entire examination process could be automated. I hope that your team will look into the matter and take appropriate measures to improve the process further.

Respected Sir, I am pleased to inform you that the importers and traders are feeling great convenience by the introduction of latest technology i.e. iPads and tablets at the examination area of Karachi International Containers Terminal. I would like to appreciate the said step taken by Federal Board of Revenue as it is playing a significant role in expediting the clearance process and facilitation of trade.The trade is being facilitated by great extent as dual time of examination of the consignments at Karachi International Containers Terminal has been decreased to a

certain degree. The examining officials with the

help of their tablets and iPads were examining and clearing the con-

Yours’ Sincerely, Mirza Waqas Baig, Karachi


JUNE 03 - JUNE 09, 2014

fBR imposes penalty on tax oďŹƒcials

ISLAMABAD: FBR has imposed penalty on a large number of tax officials, who have not filed their income tax returns for Tax Year 2013. FBR’s instructions issued to field formations revealed a large number of officials have not yet filed their IT Returns for the Tax Year 2013. Authorities have taken exception to the situation and directed the defaulting officers to file their returns by June 16, 2014 along with penalty to be calculated as per law. For the officers who fail to file return by the date, Performance Allowance will be discontinued without any further notice.

ISLAMABAd: Federal Minister for Finance, Senator Muhammad Ishaq Dar chairs a meeting to review the Updated Budget Proposals from FBR at the Finance Ministry.

KARAcHI: Ports & Shipping Minister Kamran Michael in a group photo with the key members of All Pakistan Shipping Association.

ISLAMABAd: Punjab Finance Minister, Mian Mujtaba addresses during 3rd Africa Show ceremony organized by Lahore Chamber of Commerce and Industries at its premises.

ISLAMABAd: President Mamnoon Hussain exchanges views with Federal Minister for Commerce, Engineer Khurram Dastgir Khan during a meeting at the Aiwan-eSadr. JUNE 03 - JUNE 09, 2014


Oman all set to become major regional supply chain and logistics hub

Oman is pushing ahead with a series of projects to expand its seaports, as part of a plan to position itself as a major supply chain and logistics hub in the Persian Gulf. The Port of Salalah on Oman’s southern coast is to be expanded to increase the terminal’s cargo-handling capacity many times. A new container terminal is also being built at Sohar port. Once it is completed, work will begin on a new agro-bulk terminal, which will be the first of its kind in the region.

fBR issues notices to top cricketers LAHORE

cuStOMS tOdAy RePORt


isbahul Haq, the Pakistani cricket team’s skipper along with Muhammad Hafeez, Azhar Ali and TauLiq Umar have not been informing the tax ofLicials fully in their tax returns. As a result FBR has taxed them heavily after revelation of their additional incomes. FBR has imposed additional taxes after comparing the bank accounts and tax returns of the four cricketers. The revenue body came to know that they had not disclosed additional incomes in their income tax returns Tax Year 2010-11 and 2011-12 from sponsorship and other endorsements. Details of the additional taxation reveals that Misbahul Haq

“I don’t know about the other judges, but i love that Paris Hilton and her accountant did with thier schedule C!”

has to pay for Rs 3.2 million for the two tax years; Muhammad Hafeez has to pay Rs 4.2 million as additional taxes for the two tax years; Azhar Ali has to pay Rs 1.5 million for the two tax years; while, TauLiq Umar has to pay additional taxes of Rs 1.2 million for Tax Year 2011-12 only. FBR has sent notices to the cricketers to pay the additional taxes and if they don't do it within the given time frame than they would be declared as defaulters and legal action would be taken against them, sources said. Cricketers maintain that all their tax issues are looked into by Pakistan Cricket Board which deducts all due taxes on their incomes they earn through central contracts, match fees, bonuses, sponsorship and endorsement amounts. FBR, however, maintains that the tax issues have arisen because of earnings by the players from other commercial sources and avenues apart from cricket. 


JUNE 03 - JUNE 09, 2014

Published by M. F. Riaz, Off. 91, 3rd Flr, Gul Plaza, M.A. Rd., Karachi, for Customs Today and Printed at Dhoom Printing Press Masheer Mahal Building, Off: I. I. Chundrigar Road, Karachi

Tuseday june 03 monday june 09, 2014  

Pakistan’s first in-depth newspaper that presents balanced news reports, analysis and reviews regarding Customs, Federal Board of Revenue (F...

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