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pAKIStAN’S FIRSt INDeptH NeWSpApeR oN CuStomS
26 AbC Certified vol 75 Issue No. 13
Karachi, tue Nov 20 - mon Nov 26, 2018
Weekly Weekly
Regd. No, mC-1381
pLANNINg FoR tAx ReFoRmS
Minister of State for Revenue Hammad Azhar says planning for long-term tax reforms to identify tax dodgers. | See pAge 10 | FILINg tAx RetuRNS
MULTAN
ASAD KHARAL & WAQAR ANSARI www.customstoday.com
P Customs North Region fetched extra revenue of Rs98m under all heads duties and taxes during first half of April. | See pAge 12 | RevISINg vALueS
DG Valuation revised customs values of suitcases (soft & hard) of low-end brands through VR No: 1341/2018. | See pAge 04 | LoDgINg FIR
CustomsCourtdirectedinvestigation officertocompleteinvestigations against M/s SonsTraders and M/s UKTraders for tax evasion. | See pAge 02 |
akistan’s biggest ever fraud of sales tax is exposed by Customs Today where M/s Maersk Pakistan (Pvt) Ltd has evaded billions of rupees sales tax in terms of services provided to its local clients. After Customs Today unearthed this mega scam of sales tax, Chairman Sindh Revenue Board (SRB) Khalid Mehmood has Tinally decided to conduct audit of Maersk shipping company. According to details, Customs Today Tirst published a story on October 29, 2018 titled “Pakistan’s biggest ever Sales Tax fraud: NAB, FIA asked to probe Maersk, SRB connivance” in which it was exposed that Maersk Pakistan is issuing
‘benaami’ bills without sales tax numbers, without publishing its own name on the bills and giving its sales tax numbers. As per its modus operandi, Maersk sends emails in the name of Helen De Isidero to its clients whereas it is actually sent by Mr. Maqsud through Pakistan email ID pk.import@maersk.com. Maersk Pakistan employees themselves claim that Helen works in their Manila ofTice while the email is sent from Pakistan ofTice. Furthermore, in the story it was revealed that all services are provided in Pakistan through Pakistan company M/s Maersk Pakistan Pvt. Ltd. but the company tries to show that services are provided by foreign company and their employees through using dummy names. When service provided in Pakistan by Pakistan ofTice and Pakistan employees then how can sales tax on such service remain unpaid? This obviously is a fraud to evade huge sales tax liabilities. Talking with Customs Today, Chairman
SRB Khalid Mehmood conTirmed, “We have received information that some shipping companies are not paying sales taxes and are involved in tax evasion including Maersk”. He said, “After receiving such complaints we have decided to conduct audit of these shipping companies and Maersk shipping company is also included in our list”. Khalid Mehmood said, “Maersk Pakistan is registered with Sindh Revenue Board since 2011 but now this company is in our radar and we are receiving credible information that Maersk is not paying sales tax so we have decided to obtain data of Maersk and start audit from tax year 2011-12”. Khalid Mehmood mentioned that the Sindh High Court had barred collection of sales tax on services but later on the Supreme Court of Pakistan declared that verdict null and void. Continued on page 10
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NOVEMBER 20 - NOVEMBER 26, 2018
Importer moves SHC for release of plastic scrap consignment
KARACHI: M/s Shahzad Industries approached the Sindh High Court (SHC) against seizure of its consignment of plastic scrap in bales by Collectorate of Customs (Imports) Port Muhammad Bin Qasim (PMBQ) Karachi. Counsel for the petitioner stated in his petition that petitioner imported consignment of plastic scrape in bales from different foreign exporters and filed goods declaration dated 30/10/2018 and after the clearance of the consignment from QICT when consignment arrived at the exit gate, the same was illegally impounded by the respondents.
Quetta I&I seizes non-customs paid cosmetics worth Rs6 million
Appraisement east lodges FIR against m/s Sons traders & m/s uK traders
KARACHI
KARACHI
irectorate of Customs Intelligence and Investigation foiled a bid to smuggle non-duty paid cosmetic items including branded face powder, lipsticks, dryer machines, branded shampoos and soap worth Rs6 million. Sources told Customs Today that Director Customs Intelligence and Investigation Muhammad Akram Chaudhary received a tip-off that some smugglers are trying to smuggle non-custom paid cosmetic items including branded face powder, lipsticks, dryer machines, branded shampoos and soap other things from Quetta. He constituted a raiding team under the supervision of Inspector Rashid Mustafa Preventive department and others. The team enhanced the surveillance in Dalbandin Road and started searching of vehicles. During the search operation, the team intercepted a bus bearing registration no: GHS-0742 which was going out of Quetta. During the checking, the customs team recovered cosmetic items including 3,000 sets of branded face powder, 10000 sets of lipsticks, 200 hair dryer machines, 10000 bottles of branded shampoos and different kinds of soap and other items worth Rs 6 million.
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ASO impounds Rs12m Toyota coaster, betel nuts LAHORE
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www.customstoday.com ollectorate of Customs Anti-Smuggling Organization seized over Rs12 million non-customs paid two Toyota coasters, 1000 kilograms ladies suiting fabric, one car and betel nuts, official sources told Customs Today. As per details, on the strict direction of Additional Collector Tayyaba Kayani, the ASO conducted various operations against the illegally imported items and vehicles. The ASO team consisting superintendent, inspectors including Nasir Saeed, Shahid Bhatti and others led by Deputy Collector Moazzam Raza intercepted vehicles and seized illegally imported items. The ASO seized non-customs paid Toyota coaster bearing registration no: EA 5768 coming from Peshawar worth Rs 4 million at the Pattoki Road while the second coaster was also seized at a different point at the same road. The ASO intercepted a car loaded with 1000 kilograms high quality of ladies suiting fabric worth Rs 0.8 million while Toyota Corolla car model 2000 bearing registration no 8412 was also seized by the same team.
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he Customs Court directed investigation ofTicer to complete investigations against owners/directors of M/s Sons Traders and M/s UK Traders, who were booked in a case of evasion of duties and taxes through submission of fake and forged documents showing under invoiced/suppressed transaction value of the goods. Investigation ofTicer of Customs Appraisement East submitted First Information Report (FIR) against Muhammad Saleem, owner/partner of M/s Sons Traders and Muhammad Aamir of M/s UK Traders and informed that they imported a consignment and declared as 27,144 liters basil seed ice drink of Thailand worth Rs784,198 and 18,096 liters basil seed drink in assorted Tlavour (glass bottle) valuing at Rs853, 727 and others goods. He submitted that the abovementioned accused imported goods worth Rs 2,800,869 and paid duties and taxes to the tune of Rs2,139,094; however, during the examination, goods were recovered as basil seed ice drink (Tlavour apricot, strawberry/blueberry/pineapple, apple etc), basil seed drink in assorted Tlavor of (glass bottle) (brand uno premium) and others. Investigation ofTicer further submitted that they had to pay duties and taxes of Rs7,164,624, however, they paid Rs5,447,411 and evaded the duties and taxes in the tune of Rs3,267,223. He said that the accused importers are still absconders and
— Exclusive Customs Today photo
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Collector Saeed Akram he is trying his best for their arrest. After hearing, the court took the FIR into court record and directed him to submit charge-sheet on next date of hearing. Meanwhile, The Customs Court directed investigation ofTicer of Appraisement East to complete investigations and submit chargesheet against seven importers, who were booked in mis-declaration and evasion of duty and taxes worth Rs8,204,317. On November, 14, 2018, investigation officer submitted First Information Report (FIR) against importers namely owners/part-
ners of M/s M.I Traders, Muhammad Ilyas, partner of M/s M. I Traders, Muhammad Naeem, Muhammad Saleem, Muhammad Hanif, Noor Ahmed, owners/partners/directors of M/s Nadeem & Company, owner/ partner of M/s Nadeem Shamim and others. He argued that the above-mentioned importers imported a consignment and declared as description of 17, 269 kilograms of hazelnut spread (nutella) C&F value of Rs2,627,676 and 2351.70 kilogram of crisp coconut whole almond raffaelo C&F of Rs298,192 and paid duty and taxes of Rs2,358,951,
however during the search, customs ofTicials found 17,356.42 kilograms of hazelnut spread (nutella) C&F value of Rs10,055,422 and 2398.52 kilogram of crisp coconut whole almond raffaelo C&F value of Rs3,046, 468 in which they had to pay duty and taxes of Rs10,563,267. He argued that they submitted fake and forged documents showing under invoiced/suppressed transaction value of goods; therefor, a case was registered against them and prosecution is trying its best to arrest all of them and will be produced before the court when arrested.
Customs seizes goods, vehicle worth Rs30m during first two weeks of Nov
Faisalabad Appraisement collects Rs 3742.65 million
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ISLAMABAD
tARIQ DeRYA
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ollectorate of Customs Preventive seized huge quantity of smuggled goods, offending and NDP vehicles worth Rs30 million during Tirst two weeks of November FY2018-19, while it seized smuggled goods worth Rs54 millions during Tirst four months of current Fiscal Year 2018-19. Additional Collector Muhammad Ishfaq while talking with Customs Today said that ASO showed outstanding performance during Tirst two weeks of current month and seized smuggled goods comprising foreign origin coconut, auto parts, cosmetics, alloy rims, cloth and one non-duty paid V-8 vehicle in worth of Rs30 million.
— Exclusive Customs Today photo
WAQAR AHmeD ANSARI
ADC muhammad Ishfaq
Ishfaq stated that during Tirst four month of FY18-19, the ASO posted 129% growth which showed 25% extra growth against same corre-
spondence period, telling the comparative details. He said that ASO seized Rs47.46 millions of smuggled goods and impounded 20 of nonduty paid vehicles worth Rs100.75 million while it seized Rs20.74 millions of goods and 16 NDP vehicles worth Rs73.16 million during same correspondence period. He said that during said period major items were seized comprises as foreign-origin fabric, NDP vehicles, offending vehicles (vehicles use for carrying smuggled things), fake and smuggled cigarettes, vegetables and chili, tyres and tubes, auto parts, cell phones and electronic items. He said that under direction of Zulifqar Ali Chaudhry, the ASO made major crackdown against the Indian-origin smuggled goods coming from Azad Pattan, Chakoti, Muzaffarabad and Murree to Islamabad and Rawalpindi.
ollectorate of Customs collected Rs3742.65 million during July-October of fiscal year 2018-19 against the set target of Rs4947.07 million. Sources told CustomsToday that Customs Appraisement collected revenue under the heads of customs duty (CD), sales tax (ST), income tax (IT) and federal excise duty (FED) during the above-said period. According to revenue statistics, Faisalabad Appraisement collected Rs1325.87 million under the head of customs duty against the set target of Rs1373 million in July-Oct of fiscal year 2018-19.The Collectorate collected Rs3062 million under the head of sales tax during the above-said period against the set target of Rs3521m. Faisalabad Appraisement collected Rs 7.67m under the head of withholding tax (WHT) during the above said period against the assigned target of Rs53m. —CT Report
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NATIONAL 03
NOVEMBER 20 - NOVEMBER 26, 2018
Faisalabad Adjudication decides 24 cases involving Rs41.982m
FAISALABAD: The Customs Adjudication authorities settled as many as 24 cases involving Rs 41.982m during the month of Oct.Customs Adjudication issued ONO in favor of the ASO, Customs Intelligence and Investigations Faisalabad and Field Investigation Unit Khushab. Sources said that all 24 cases including seizures of cloths, Indian origin red chilli, Iranian diesel, cell phones, foreign origin cigarettes, auto parts, Toyota Corolla vehicles with different registration numbers, ladies cloths and toys which were confiscated during different raids by the customs authorities.
FBR directs field formations to use all available resources to recover Rs60b shortfall
‘SC should constitute panama-like JIt to probe maersk St evasion’
ISLAMABAD
SHAHID mINHAS
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MULTAN
ImRAN ALI KHAN
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he Supreme Court of Pakistan should constitute a high level Joint Investigation Team (JIT) similar to Panama case for probing mega sales tax fraud of M/s Maersk Pakistan (Pvt) Ltd. Pakistan’s biggest ever fraud of sales tax revealed by Customs Today against M/s Maersk Pakistan (Pvt) Ltd should be investigated appropriately for recovery of robbed amount. It was stated by former Secretary Multan Tax Bar Association and well-known tax consultant Muhammad Imran Ghazi in his exclusive interview with Customs Today the other day. He said that every country in the world serves the national economy with the help of legitimate collected taxes from the society in order to provide the right economic and required infrastructure for the nation to develop and prosper. Collection of legitimate taxes always plays vital role in the development of economic growth of nation. He said that Maersk shipping line operating in Pakistan has been already notorious due to their illegal activities in the country as they are charging exorbitant demurrage and detention charges from importers and exporters in the country. Exporters and importers have already moved the courts and other forums to bring them to justice for violating set principles and rules. He said M/s Maersk Pakistan (Pvt) was involved in violation of
— Exclusive Customs Today photo
ederal Board of Revenue (FBR) has directed all field formations to utilize all available resources to recover Rs60 billions of shortfall faced during the current fiscal in the next months, it is learnt here. Official sources told Customs Today that FBR has reiterated the strict implementation of monthly revenue strategy and directed the field formations to take steps under Section 137 for extra revenue collection and also directed for early recovery of the outstanding dues of Rs 98.5 billion under the head of income tax (IT), federal excise duty (FED) and sales taxes, sources confirmed. Sources said that the board also directed the field formations to take steps under Section 161 and 162 pertaining to withholding tax audit and collect extra revenue in order to recover the shortfall faced by the board in the current fiscal year. Field formations have also been ordered to use Section 11, 25 and Section 38 of Sales Tax Act 1990 while section 46 FED Act, 2005 for the early solution of audit cases earlier selected sources add. Sources said that FBR directed the field formations to take necessary steps for the recovery of dues which were defraud in the sales tax concessional rate. It is important to mention here that revenue target for current Fiscal Year 2018-19 is Rs4,435 billion and the required growth is 15.4% over the collection of Rs3,842.1 billion during FY 2017-18. In absolute terms, Rs592.9 billion additional amount is needed to be collected in FY 2018-19 to meet the target.
Former Secretary multan tax bar Association muhammad Imran ghazi SRO 1220(I)/ 2015 for charging illegal detention and demurrage charges through blackmailing for releasing shipments. Maersk line has collected billions of rupees in terms of taxes from importers in the country but they have not paid their justiTied taxes to the government of Pakistan. He said that weak tax enforcement system is causing serious economic challenges in the country because foreign shipping company is openly committing tax evasion and causing huge loss to the national exchequer by evading
huge amount of sales tax. Pakistan is one of the under-developed nations whose economy is also relatively weak due to massive corruption and foreign origin notorious shipping company is applying dirty tactics to evade billions of taxes. If any Pakistani company commits tax evasion of a single penny in Denmark, they will not exempt any taxes because tax evasion is impossible in the developed nation due to their fair tax collection institutions, he said, adding that Pakistani government should
conduct forensic audit of taxes paid by M/s Maersk Pakistan from launching date of its operational services to recover evaded amount of sales taxes in billions. He said Maersk Pakistan is involved in stealing huge revenue through issuing ‘benaami’ bills without sales tax numbers to clients. He appealed Chief Justice Saqib Nisar and Asset Recovery Unit of the government to form high level JIT similar to the Panama case for interrogation against Maersk Pakistan for sales tax evasion and recover looted amount.
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04 NATIONAL
NOVEMBER 20 - NOVEMBER 26, 2018
Customs to start WeboC system at epZ soon
KARACHI: Collectorate of Customs Export is all set to implement WeBOC module in Export Processing Zone (EPZ) from next week as all the stakeholders have consented automation of the process and transportation of goods between container terminals and the zone in bonded carriers. Sources told Customs Today that the implementation of WeBOC module for EPZ consignments and all transportation of goods through bonded carriers would eliminate enrooted pilferage of EPZ cargo, plug revenue leakage and facilitate Export Processing Zone (EPZ) stakeholders including investors.
Dg valuation revises customs values of suitcases
Customs I&I DG Zahid Khokhar transfers officers, lower staff ISLAMABAD
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WAQAR AHmeD ANSARI www.customstoday.com
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m HAYAt
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ollectorate of Customs Preventive conducted a raid at Hall Road Market and recovered large quantity of illegally imported DTH Equipment and Dish Satellite Receivers worth Rs17 million. In compliance with directions of the Supreme Court of Pakistan, the Collectorate launched a massive crackdown against illegal DTH equipment, Dish Satellite Receivers in different cities falling in the jurisdiction of MCC Preventive Lahore. In continuation of this policy, on receipt of a tip-off, after obtaining search warrant from the Court of Judicial Magistrate, a raid was conducted at a dumping place situated at Hall Road Market Lahore. The raid resulted in recovery of huge quantity of non duty paid smuggled DTH equipment, Dish Satellite Receivers. During the proceedings of raid, the members of the Association of Hall Road Market extended full cooperation and support to the staff of Customs in respect of search and recovery of such DTH equipment. Authorities recovered large quantity of DTH equipment and ancillary items of assorted brands valuing approximately Rs17 million. A case has been registered against smugglers and further investigations are under way.The aiding team included Deputy Superintendent Mazhar Abbas, Inspectors Nasir Saeed, Sajjad Bukhari, Abdul Rehman Butt, Shahid Bhatti, Saeed Randhawa, Zafar Iqbal,Tariq Baig, Anjum Sheraz, Javed Butt,Waheed Bhatti and several sepoys.
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Dg valuation Surriya butt
Section 25 of the Customs Act, 1969 were followed to arrive at customs values of suitcases (soft & hard) of low end brands. Transaction value method provided in Section 25 (1) was found inapplicable owing to wide variation in the values being declared to the customs and incomplete descriptions. Identical
/ similar goods values methods provided in Section 25(5) & (6) were examined for applicability to the valuation issue in the instant case which provided some reference values of subject goods but the same could not exclusively relied on due to wide variation in declared values of subject goods.
ASo Customs preventive seizes another smuggled betel nuts consignment C
KARACHI
mubeeN HuSSAIN www.customstoday.com
ollectorate of Customs Preventive beefed up the security and surveillance at the entry and exit point of the city to nab the smuggler and to restrict the smuggling activities. According to the details, on the tip of higher authorities the Deputy Collector Customs Preventive Anti-Smuggling Organization (ASO) Headquarters Muhammad Faisal constituted a team to foil any bid of smuggling. The team of ASO checked sev-
— Exclusive Customs Today photo
Customs Preventive recovers smuggled DTH equipment, satellite receivers
— Exclusive Customs Today photo
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he Directorate General of Customs Valuation revised the customs values of suitcases (soft & hard) of low-end brands thrugh Valuation Ruling No: 1341/2018 under Section 25A of the Customs Act-1969. According to the details, the customs values of suitcases (soft & hard) of low-end brands were determined vide Valuation Ruling No. 915/2016 dated 25-08-2016. Since the valuation ruling was more than two years old and representations were received to Directorate General to determine the values afresh in terms of current international pricing. Therefore an exercise was initiated under section 25A of the Customs Act, 1969 to determine the customs value a fresh. Stakeholders’ meeting was scheduled on 07.02.2018 & 11.09.2018. The stakeholders were requested to bring invoices of imports during last three months showing factual value. Websites, names and-e-mail addresses of known foreign manufacturers of the item in question through which the actual current value can be ascertained. Copies of contracts made / LCs opened during the last three months showing the value of item in question. Copies of sales tax invoices issued during last four months showing the values of supplies (excluding duty and taxes) to substantiate their contentions. Valuation methods given in
ustoms Intelligence & Investigation Director General Muhammad Zahid Khokhar has transferred a number of officers of his directorate with immediate effect. Superintendent Saifullah has been transferred from Headquarters (HQ), Islamabad and posted at Regional Office (RO) Lahore. Intelligence Officers Shabich Haider, Liaquat Ali and Muhammad Aslam Nadeem have been moved from Headquarters, Islamabad and posted at Regional Office (RO), Karachi. Superintendent Syed Ashfaq Hussain has been transferred from HQ Islamabad to RO, Peshawar. Superintendent Mehar Muhammad Rafique has been transferred from RO Karachi and posted at RO Peshawar. Superintendent Malik Nasir Saeed has been moved from RO Multan to HQ Islamabad. Superintendent Muhammad Sarwar has been transferred from RO Lahore to RO Multan. Intelligence Officer (IO) Bashir Tabassum has been moved from RO Hyderabad and posted at RO Quetta. IO Muhammad Anwar has been transferred from RO Multan to HQ Islamabad. IO Zulfiqar ali Dogar has been transferred from RO Lahore to RO Karachi. IO Mansoor Nasir has been moved from RO Faisalabad to RO Peshawar. IO Saad Iqbal has been transferred from RO Faisalabad and posted at RO Gujranwala. IO Abdul Munir has been transferred from RO Peshawar to RO Rawalpindi and IO Shabbir Ahmed has been moved from RO Quetta to RO Karachi. LDC Zohaib Mujeeb has been transferred from HQ Islamabad to RO Karachi; Driver Agha Mukhtar Ali from HQ Islamabad to RO Hyderabad and some sepoys.
eral vehicles and followed the procedure of customs to inquire regarding the legal documents and carried out the search of all kind of
luggage carrier. During the search, a trailer bearing registration no TLN-996 was intercepted but the team of
ASO faced resistance from notorious smuggler Haji Sadiq Kakar. On the directive of the Deputy Collector ASO Headquarters Muhammad Faisal completed search of the container no: TCNU7114459 loaded on trailer bearing registration no TLN-996 was carried out during which it was conTirmed that huge quantity of betel nuts were being smuggled in the city. It was learnt that the container was loaded with one hundred and seventy gunny bags of smuggled betel nuts weighing 19.55 tons whereas the total cost and freight value was estimated at Rs52 million.
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ollectorate of Customs will leave no effort to enhance trade ability with Afghanistan, said by Collector Mohammad Saeed Jadoon. The collector was talking with importers on Monday whose trucks are held at Torkham Customs Station for more than week due to incomplete declaration, sources in Customs House Peshawar informed Customs Today. The importers apprised the collector about the difTiculties and losses due to pending delivery of the goods loaded in the trucks at Torkham Customs Station. The importers were frustrated for delay of goods on which they broke the NLC line and demanded clearance of their trucks last week but the protests also went in vain. The importers said the trucks contained eatable goods including rice and bean but they are held by Customs department. The sources said that the collector customs ensured that these trucks will be cleared within a week but no effort will be spared to mend the ways of those who don’t follow customs rules and regulations. Import and export through WeBOC service at Torkham Customs Station was made mandatory after which the importers suffered due to lack of facilities. Customs department in the available resources will try its best to facilitate importers, the collector said. The collector customs vowed to highlight the difTiculties faced by importers at Torkham border to the higher authorities and said the customs department is trying hard to overcome the challenges to increase the net revenue collections.
— Exclusive Customs Today photo
NOVEMBER 20 - NOVEMBER 26, 2018
Meanwhile, Collectorate of Customs anti-smuggling unit seized non-duty paid goods worth Rs24.65 million in one and a half month. Sources in Customs House informed Customs Today that upon speciTic information passed on to anti-smuggling squad posted at different check posts at Peshawar city foiled nine bids of smuggling of drugs and thwarted 13 attempts of smuggling of non-duty paid goods including tyres, clothes, cosmetics, spare parts along with other speciTic goods of foreign origin. Sources said that during October and 13 days of Nov on the directives of the Collector, the ASO teams not only impounded NDP vehicles loaded with goods but also impounded non-duty paid vehicles from different parts of the province. The Customs squad Mobile 1 posted at Chamkani Morh area of Ring Road Peshawar recovered cosmetics from a passenger bus which was traveling from Lahore to Peshawar. The ASO also foiled attempt of smuggling cloth from Kharkhano Market where salesmen while selling NDP cloth were arrested. Sources said that anti-smuggling squad Mardan foiled four attempts of smuggling while three attempts of smuggling were thwarted by Anti- Smuggling Unit Nowshera. The anti-smuggling squad Nowshera on GT road intercepted a suspicious trailer loaded with China origin clothes and case was registered against the accused smugglers. The Collector Customs Muhammad Saeed Jadoon lauded the role of Customs anti-smuggling unit for thwarting attempts of smuggling to beneTit national exchequer. The sources said the chairman FBR speciTically ordered to curb the smuggling of tyres for which collector
customs issued directives to Customs staff for elimination of trade of smuggled tyres. The Collectorate of Customs in the available resources is trying its best to implement customs rules from Peshawar to Torkham to beneTit the national exchequer. Meanwhile, Customs department used new system to clear import vehicles from Afghanistan to Pakistan at Peshawar. Test- operation of import cargo of fresh apples under TIR Carnet from Afghanistan was successfully processed. Export cargo under TIR Carnet has already been processed and shipment successfully reached Afghanistan. Two consignments of raw cotton have also reached To r k h a m from
Mashad Iran via Afghanistan under TIR Carnet which will be cleared after completion of customs requirements. Another consignment of fresh fruit reached Torkham on Sunday. TIR Carnet operation of export and import has started following Pakistan’s accession to TIR Convention in July 2015. A document pursuant to the TIR (Transport International Routier) permitted sealed road transport shipments to traverse TIR-member countries without undergoing customs inspection until reaching the destination country. Each TIR Carnet has a unique reference number. A TIR Carnet may have 4, 6, 14, or 20 vouchers, as one pair of vouchers is used per country. The number of vouchers indicates the number of countries that can be transited, including the countries of departure and destination while under cover of this type of Carnet (e.g. a 20voucher Carnet may be used for a TIR transport through up to 10 countries). Each individual TIR Carnet can be used for only one TIR transport.
Importers apprised the collector of the difficulties and losses due to pending delivery of the goods loaded in the trucks at torkham Customs Station
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SPECIALREPORT 07
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08 EDITORIAL
NOVEMBER 20 - NOVEMBER 26, 2018
Founder & Chairman Zulfiqar Ali CEO and Chief Editor Asad Kharal Editor Rahil Yasin editor@customstoday.com.pk For advertising & subscription marketing@customstoday.com.pk www.customstoday.com Phones: 042-35781643-4, Fax: 042-35781645 Address: 627, Siddiq Trade Centre, Gulberg, Lahore
eDItoRIAL
Worst is over for economy
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he worst is over for Pakistan’s beleaguered economy, which will turn around in the third year of the current government, said Finance Minister Asad Umar. Just four weeks ago, the economy was on the brink of collapse and the country could afford only two months’ worth of imports and was unable to pay back debt payments. However, the new PTI-led government came to save the economy and Imran Khan along with his team have managed to acquire yet another chance for the country. From that point onwards, the country has come a long way in the turn of events on November, 2018. There are multiple hurdles like corruption, internal and external debt, the government bodies in losses, low tax net, smuggling and a host of other problems that need serious intervention and the new Government seems committed and in high spirits, and that too for cogent reasons. From the point of financial insolvency and the decision to go to IMF for a bail out, Imran khan and his team kept looking for alternate financing sources. After two attempts, the Saudi Government agreed to give a financial nudge of around six billion dollars. All this was done to reduce the exposure to structural adjustments of IMF and reliability on more than one source of liquidity. The Saudi Government also promised huge investments into uplift of Gwadar and industrial zones across Pakistan. But this was merely a straw compared to what was required to save Pakistan’s economy. Aware of the facts, the new Government sought relief from the Chinese Government and the reply is did not come as a loan or bail out but much more. Imran khan and a team of public and private stakeholders have made an astounding trip to China. The visit conducted by Xi Jinping, the Premier and the Li Keqiand, the Prime Minister. As a high point, Pakistan managed to sign fifteen MoUs with the Government of China. These agreements cover a wide range of fields such as Trade, Commerce, Industry, Technical education, Services, Banking, Construction, Cultural ties and military assistance. China unveiled a special program for students of Pakistan who wish to study in China. The plan is to double the number of students which stands at twenty five thousand students annually. Another important step in the same sector was the inauguration of Youth Communication Committee which will establish first-hand and direct contact between academic experts and students from both countries.
managing rupee devaluation P
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akistan’s economy has been wobbly for months as Prime Minister Imran Khan’s new government is seeking the country’s 13th International Monetary Fund (IMF) bailout since late 1980s. However, there are some questions: Was the recent devaluation necessary and if yes, then by how much? Is the downward revision in rupee’s value based on some fundamentals or is purely need or sentiment driven? If based on some fundamentals then what short-term and long-term measures is the SBP proposing to stem this parity slide and if based on the latter, then what measures does the SBP plans to adopt in order to mitigate this risk cum uncertainty, at least in the short-term? Never mind the answers, as not only
one doubts that they will be forthcoming, but also because there is no visible institutional history of a transparent decision making mechanism for currency adjustments prevalent in the relevant quarters - whim of the finance minister in the saddle generally rules the roost! Still, what is of paramount importance for the government is to somehow give conTidence to the people that there truly exists an exchange rate policy, which is not merely driven by market sentiment or borrowing compulsions. This conTidence in the coming days would be necessary cum important for the government itself to manage the frequency and the size of the inevitable depreciations yet to come in the value of Pak Rupee. Exchange rate, as we know, is the key price that links an economy with the global market. This linkage becomes distorted or is even disconnected for two main reasons: If the
The fair parity should be determined by factors affecting demand and supply of the pair of currencies, say in our case the Pak rupee and the US dollar
price of our national currency is too high, then foreign economies Tind it expensive to do business with us and if the price is too low, then it becomes expensive for the domestic economy to do business with the rest of the world. In addition, an excessively undervalued currency not only retards investment, growth and employment generation, but can render domestic manufacturing uncompetitive over the long run, as prohibitive capital costs become a barrier to industrial balancing, modernisation, innovation and value addition. So it is crucial for the policymakers to get the price right, especially if an economy (e.g. Pakistan) is too small to affect world markets. In theory, the fair parity should be determined by factors affecting demand and supply of the pair of currencies, say in our case the Pak Rupee and the US Dollar. However, putting this principle to practice is a rather complex process.
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NATIONAL 09
NOVEMBER 20 - NOVEMBER 26, 2018
Another importer booked in betel nuts smuggling case gets bail
KARACHI: The Customs Court granted bail to suspect namely Javed Ahmed Chhajro son of Muhammad Usman, proprietor of M/s Star Traders, who was booked in a case of attempting to smuggle non-duty-paid 18,792 kilograms betel nuts and other contraband goods. Counsel for the accused argued that his client is innocent and is falsely implicated in this case, who is ready to face trial and giving assurance to appear each and every date of hearing. After the hearing, court granted him bail against the surety of Rs200,000 and directed him to appear before the court on next date of hearing.
Customs I&I recovers smuggled curtain & sofa cloth worth Rs27 million
‘Customs to help ptA establish mobile phone registration desks at airports’
LAHORE
ISLAMABAD
m HAYAt
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tARIQ DeRYA
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irectorate of Customs Intelligence and Investigation (I&I) recovered huge quantity of non-customs paid curtain and sofa cloth from Furniture Market of Gowalmandi. Sources told Customs Today that Director Customs Intelligence Rubab Sikandar received credible information about storage of non-customs paid cloth. She formed a team under the supervision of Superintendent Mohammad Sarwar which also includes Zulfiqar Dogar, Agha Sultan Haider, Nadeem Ehsan, Ihtesham Naveed, Fida Hussain and Haji Iftikhar. The above-mentioned team raided a godown located in Furniture Market of Gowalmandi. The godown belonged to Hashim Khan and Zar Alam Khan. Sources told that curtain and sofa cloth were smuggled from Peshawar for further supply in local markets of Lahore. Cloth was smuggled through different passenger buses coming from KPK.
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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: newsdesk@customstoday.com.pk
— Exclusive Customs Today photo
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he Financial Action Task Force (FATF) showed satisfaction on working environment of Pakistan Customs but asked to improve enforcement on airports as well as other jurisdictions. Talking with Customs Today, Additional Collector Nisar Ahmad Phularwal said that Pakistan Customs with assistance of PTA Tlourished new strategy to establish mobile phone registration desks at airports to curb smuggling of non-customs paid mobile phone. He said that a delegation of FATF, which visited Pakistan last month, showed satisfaction on working of Pakistan Customs whereas they advised to improve the Customs enforcement. Answering to another query he said, “We have Tinalized a strategy regarding anti-smuggling of mobile phones through airports.” Highlighting the issue, he said that actual issue is that there are some certain ways to bring mobile phones into the country from abroad. He said that Tirst of all mobile phones are brought into the country via commercial import where Pakistan Telecommunication Authority’s (PTA) has authorized importers to bring their consignments after Tiling GDs, secondly passengers can bring mobile phone with them when traveling to the country. He said, “After long discussions
and meetings with PTA authorities, we have reached the conclusion to form mobile phone registrations desks at arrival of the national airports of the country, telling the details of procedure which will be adopted to get the duty and taxes by passengers bringing mobile phones in accompanied baggage while they travel to the country. He added that stander operation procedure (SOPs) soon
ADC Nisar Ahmad phularwal
will be signed with all the national and international airlines to follow the procedure purposed by Pakistan Customs and PTA. Nisar said that passengers traveling to Pakistan will be given a performa by the staff of airline to seek details of mobile phones. He added that after landing at Pakistan, the passenger will be bound to stamp mobile duty performa on mobile phone
registration desk run by Customs staff on arrival lounge. Nisar stated that copy of said scanned performa will be sent to PTA via online after paying duty taxes as per tariff at Customs House, and after getting scanned copy of performa, the PTA will allow Non-Objection Certificate (NOC) to the mobile holder and the mobile phone will become operational getting legal status.
FBRchairmanurgedtotakestepstocurbtyresmuggling To,
Mohammad Jehanzeb Khan, Chairman, FBR, Islamabad Dear Sir,
We, representing local tyre industry, request you to take crucial measures to curb smuggling of tyres into Pakistan which is eating up precious government revenues and foreign exchange. Today many local industries have either shut down or moved out because of this illicit trade, which resulted in the loss of jobs and loss of foreign exchange. The same situation is being faced by the local tyre industry. Smuggling is a termite that eats and hollows a country from within. It should not be allowed or tolerated for a second.
Removing Regulatory Duty (RD) on smuggling prone items, is not the solution. The imposition of RD to preserve foreign exchange by reducing imports last year has reduced the number of tyres imported but not drastically. The data gathered by PRAL/CARE (July’17-June’18) showed that the total percentage of imported tyres has only dropped on average by 11 percent after the imposition of RD. The latest Tigures show that smuggling meets over 52 percent of the tyres demand. If we minus this 11 percent reduction in the imports due to RD imposition, the 41 percent was still being smuggled so smuggling is not a result of RD imposition. Therefore, smuggling needs to be stopped and 41 percent is too large a Tigure to ignore. A large percentage of Truck Bus Radial (TBR) tyres are imported from China. The government needs to enact
manufacturing friendly policies so the industrial base of our country grows, and we lose our dependence on imported Tinished goods. People should also be encouraged to invest money in manufacturing and build tyres in Pakistan rather than importing forever. The government needs to clearly differentiate between importers and manufacturers in their policies. Currently, there are only a handful of tyre manufacturers competing against over 100 smuggled or heavily under invoiced tyre brands. Unless the industry is given some protection it will not grow, while imposition of RD was a good step in this regard but it needs to remain in place for 5 to 10 years so that the local industry can plan and implement their expansion accordingly. FBR should raid markets and seize tyres that the dealers cannot show papers for. This should not be hard as the smugglers
are selling these tyres openly in the commercial centres. It should also be ensured that smuggled tyres don’t come in through the Border Check Posts at Chamman and Landi Kotal. The government should re-evaluate the data of the items being imported via Afghan Transit Trade (ATT) and see if the numbers of tyres being imported are supported by the vehicle population in Afghanistan. Items under the guise of ATT are either unloaded in Karachi or come back from the Afghan border via smuggling. This needs to be addressed and customs department needs to ensure that this facility is not misused. Best Regards,
Hussain Kuli Khan CEO, MD & Executive Director, General Tyre & Rubber Co Karachi
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NOVEMBER 20 - NOVEMBER 26, 2018
SHC seeks remarks on petition filed by m/s Conveyor System Int’l
KARACHI: The Sindh High Court (SHC) issued notices to the Customs department and deputy attorney general on a constitutional petition filed by M/s Conveyor System International against enhancement of valuation consignment of roller chain by Collector of Customs Appraisement West. While hearing the petitiona two-member bench, headed by Justice Aqeel Ahmed Abbasi, also directed them to file their para-wise comments on next date of hearing.
Hammad Azhar says planning for long-term tax reforms ISLAMABAD
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M
inister of State for Revenue Muhammad Hammad Azhar has said that he is planning for long-term tax reforms and working on improved technology to allow the government to tap existing Tinancial databases to help identify tax dodgers. “There is a lot of catching up to do,” Azhar told and international news agency in an interview. One of the world’s lowest tax collection rates partly help explain the shoddy state of Pakistan’s hospitals and schools, and why the illiteracy rate hovers above 40% in the mainly Muslim nation of 208 million people. Prime Minister Imran Khan, who took power in August, has vowed to double tax collection by reforming the Federal Bureau of Revenue (FBR). One of Khan’s Tirst acts as premier was to replace the FBR chief. In recent months, the FBR has launched a crackdown on 350 wealthy people targeting landlords and owners of luxury cars, as well as individuals who have a “trail of large business transactions and business deals” but don’t Tile tax returns. But Pakistan’s history is littered with statements by incoming governments announcing crackdowns and pledging tax reforms that Tizzle out because of a lack of political will to force
the rich and powerful to pay taxes. To widen the base of payers, Revenue Minister Azhar said the government plans to use a carrot and stick approach: intensify targeting of evaders while at the same time making it easier for payers by allowing them to Tile taxes under a single window, where all the relevant information would be stored. Azhar says his team is using existing government data on car
minister of State for Revenue muhammad Hammad Azhar
purchases, bank transactions and air travel histories to build a database that will identify and proTile wealthy tax dodgers. But it would take a few months for most of the disparate data on the government’s books to be brought under one platform. Such efforts are likely to go down well with the IMF, which in return for bailing out Pakistan, is expected to demand it carry out structural reforms, including
widening the income tax base. The previous government increased the tax-to-GDP ratio to around 13% from 10.1% – but that is still far below the 34% average among members of the Organisation for Economic Co-operation and Development. Much of the increase was due to import duties, sales taxes, and other indirect taxation, which accounts for nearly 63% of Pakistan government revenue.
One of the biggest potential prizes for Azhar is capturing Pakistan’s black economy, in which property, goods and services are sold for cash to avoid taxation, and which many people believe is bigger than the formal $310 billion economy. “We really have to discourage the cash economy,” Azhar said. “All this money is handed in cash under the table, and that’s something we want to make difTicult.”
CustomsToday exposes Maersk sales tax mega scam, SRB starts audit T
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he SRB will take action across the board against anyone found involved in tax evasion,” he asserted. Commissioner Operations Sindh Revenue Board (SRB) Mohammad Amir said that stern action would be taken against M/s Maersk Pakistan (Pvt) Ltd after completion of audit by the Board as it is found that the company ‘evaded’ sales tax on services worth billions of rupees. Talking exclusively with Customs Today, Amir said that the Board will deTinitely issue a show cause notice to Maersk Pakistan after completion of audit. It is a common practice that the Board cancels license of tax evading companies as it has already
cancelled licenses of 84 companies after completing all legal formalities. If a company does not pay sales tax after issuance of notice, then the Board starts process to cancel its license. He said M/s Maersk Pakistan (Pvt) Ltd earned $24299 million in 2017 and paid only Rs76.67 million sales tax which compelled the SRB to conduct audit of the company. Maersk Pakistan shipping company posted business of $27117 million in year 2012, $26196 million in 2013, $27351 million in 2014, $23729 million in 2015, $20715 million in 2016 and earned $24299 million in year 2017 but the company paid Rs76.67 million tax in last Tiscal year. SRB Tax Advisor Mushtaq Kazmi is supervising the whole audit process, he added. The Commissioner Operation SRB further said that Maersk
Pakistan is registered with the Board since 2011, after media exposed the tax evasion by the company and the Board received several complaints in this regard, Tinally it is decided to scrutinize all the record of the company of last 7-8 years because the company is not paying taxes according to its actual income. He said that there are complaints that the company is also involved in benami bills scandal. Relevant quarters say that Commissioner II of the Sindh Revenue Board was bound by the NotiTication No. 3-4/20/2017 to collect sales tax on services from the shipping lines as mentioned in point 15 of the table which is also available on the ofTicial website of Sindh Revenue Board http://www.srb.gos.pk/contents/No tiTications/SRB-3-4.20.2017.PDF Business community says that Commissioner II, instead of keeping
mum over the issue, should fulTil his duties and collect sales tax from the Maersk Pakistan and also recover the evaded sales tax worth billions and also lodge FIR against the Maersk ofTicials for the huge scam so that others do not commit such criminal evasion of sales taxes. Such funds so collected will go a long way in developing our country. According to a document of Sindh Revenue Board named Working Tariff (amended up to 4th December, 2017), the shipping lines are bound to pay at least 13% sales tax on services as mentioned in table which is also available on its ofTicial website http://www.srb.gos.pk/contents/D ownloads/20171204007_WORKING_TARIFF_AMENDED_2017.pdf It is pertinent to mention here that Centre for Investigative Journalism (CIJ) appealed to the Supreme Court of Pakistan to intervene and
investigate connivance of Maersk and Sindh Revenue Board in the alleged mega scandal.Meanwhile, within hours after a section of media exposed the biggest ever sales tax scam of Maersk lines, Danish Ambassador to Pakistan His Excellency Rolf Holmboe made a hotline contact and urgently met with Minister for Maritime Affairs Ali Haider Zaidi to pressurise him to in turn put pressure on local media to stop exposing Maersk Pakistan Pvt. Ltd. Maersk Line went up to such an extent that they even sent to a media house posts and photos of the Danish Ambassador having an emergency meeting with Ali Haider Zaidi so as to silence the media house instead of asking their company to abide by local laws and pay taxes according to law.
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CARTOONSSPECIAL 11
NOVEMBER 20 - NOVEMBER 26, 2018
Customs Court accepts challan of satellite receivers smuggling case
KARACHI: The Customs Court issued non-bailable warrants against suspect namely Sudham, CEO of M/s Modern (Bunty) Electronics Shaheed Ganj Sukkur, who was booked in a case of attempting to smuggle and sale of satellite receivers (C Line)/DTH equipment in open market. Investigation officer of FIA submitted interim charge sheet and informed that on actionable information, a team of FIA raided electronics market Shaheed Ganj Sukkur and found 60 illegal satellite receivers (C Line) and other goods.
Customs Court approves remand of suspect involved in Q mobile smuggling case KARACHI
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he Customs Court sent suspect namely Taj Muhammad son of Baig Muhammad, who is involved in a case of attempting to smuggle non-duty paid Q mobiles etc, to customs preventive on physical remand. Investigation ofTicer produced the above-mentioned suspect before the court and informed that on actionable information, a customs team intercepted a Toyota Hiace van bearing registration no: JF-9264 near Moachko Choke Point RCD Highway, Karachi. He further informed the court that during the search, customs ofTicials recovered 108 Q Mobiles, SP-2000 & SP 3000 worth Rs216,000; 59 Nokia 3310 phones worth Rs236,000; 432 Nokia assorted brand mobile phones worth Rs648,000; 1050 packets of assorted brand Indianorigin gutka worth Rs1,327,500; 12 SISCO satellite receivers used made is China model D-9865
worth Rs36,000; 2 cartons containing SPARK chocolate made in Iran worth Rs14,840 from the said Hiace. He said that during search, the arrested accused was asked to produce lawful documents,
which he failed to produce; therefore, goods were seized and shifted to Customs House and the suspect was also arrested. He argued that prosecution needs further investigations; therefore, court may send
him to customs department on physical remand. After his arguments, court sent him to customs department and directed investigation officer to produce him on next date of hearing along with progress
Customs Court grants bail to suspect booked in betel nuts smuggling case
report. Case was registered for violation of under Section 2 (s) 156 (2) and 178 of Customs Act, 1969 punishable under Clauses 89 of Section 156 (1) ibid read with Section 3 (1) of Imports & Export Control Act, 1950.
Faisalabad Customs seizes alcohol bottles from airport FAISALABAD
NAeem SHeIKH
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he Customs Court granted bail to suspect namely Akhtar Javeed Khan son of Nawaz Khan, who was booked in a case of attempting to smuggle non-duty paid betel nuts and others contraband goods.
Counsel for the accused appeared before the court and argued that his client is innocent and was falsely implicated in this case, who is ready to face trail; however, he has apprehension of arrest. According to prosecution, on an actionable information, customs ofTicials raided at KBX Railway drive ports Karachi in front of shed of M/s Super Shaikh Goods Co, Karachi and during
the search of loaded railway wagon No.91214 at arrive from Lahore and recovered 45 gunny begs containing betel nuts, 29 cartons containing cigarettes and 40 pp begs containing foreign origin gutkha. Case was registered for violation of under Section 2 (s), 156 (2) and 178 of Customs Act, 1969, punishable under Section 156 (i) ibid read with Section 3 (1) of Imports and Export Control Act, 1950.
ustoms officials deputed at Faisalabad International Airport confiscated three wine bottles from passengers travelling via different flights. Sources told Customs Today that the officers carried out operations in different flights coming from Dubai to Faisalabad, Turkey to Faisalabad, Jeddah to Faisalabad, and Muscat to Faisalabad. Customs inspector Muhammad Ramzan Saeed Chohan and Qadeer Masih intercepted a passenger Adil Sardar who arrived at Faisalabad from Dubai via Flydubai Flight No FZ-323. The customs team asked the passenger to open the bag in the presence of two witnesses which led to the recovery of three bottles of foreign origin liquor brand blended Scotch Whisky. Customs allowed all the passengers to go after the seizure of alcohol bottles from their possession. The authorities seized the liquor bottles under the contravention Section 2(S) read with SRO 566(1)/2005 Section 15 and 16 of the Customs Act 1969 and submitted a report to the Customs Adjudication.
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NOVEMBER 20 - NOVEMBER 26, 2018
Customs court imposes Rs2m penalty on thai currency smuggler
LAHORE: A special customs court imposed a penalty of Rs2,000,000 on a Thai national involved in a foreign currency smuggling case. The court also detained the accused till the rising of the court as a sentence. Special Judge Customs Khaqan Babar conducted the proceedings of the trial. The customs officials arrested the Thai national, Sochi, from Allama Iqbal International airport and recovered $75,000 from his possession, in October. The accused was ready to depart for Bangkok through Thai Airways.
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ederal Board of Revenue (FBR) Member Taxpayers (Audit) Nausheen Javaid Amjad said that Section 214 E of Income Tax Ordinance 2001 is inserted to control the automatic selection of late income tax Tilers. She was addressing the participants of a seminar organized by Pakistan Tax Bar Association (PTBA) and Lahore Tax Bar Association (LTBA) in Corporate Regional Tax OfTice Lahore. Nausheen Javaid Amjad said that there are two major amendments in the law related to the audit, one is removal of section 214 D and second is insertion of section 214E. The purpose of insertion of section 214E is to facilitate taxpayers and remove pressure on those taxpayers who Tile their tax returns late and their cases are selected for audit automatically. Now, these taxpayers can pay 25 percent more tax as compared to the last tax year to conclude their audit cases. She said that it is quite surprising that in the presence of advance technology, more than 1000 taxpayers still Tiled their returns using old method. She said that the system regarding Tiling of returns is updated on PRAL and now
there is no need for taxpayers’ visit to any tax ofTice. Only taxpayers can visit PRAL website to resolve their issues. In the seminar, Chief Commissioner Large Taxpayers Unit (LTU) Asim Majeed, Chief Commissioner Corporate Regional Tax OfTice (CRTO) Syed Nadeem Rizvi, Chief Commissioner Regional Tax OfTice-II (RTO-II) Sadia Sadaf Gillani and some other audit related ofTicers of regional tax ofTices participated. President Pakistan Tax Bar Association (PTBA) Abdul Qadir Memon, Secretary PTBA Zubair, President Lahore Tax Bar Association (LTBA) Monam Sultan, Formar president of LTBA Chaudhary Qamar Zaman, all ofTice bearers of Lahore Tax Bar Association (LTBA) and tax lawyers participated in the seminar. During the seminar, President Pakistan Tax Bar Association (PTBA) Abdul Qadir Memon said that taxpayers must Tile their tax returns till 31 December because after due date Federal Board of Revenue has no mandate to extend the date. The insertion of section 214E is success of PTBA because Pakistan Tax Bar Association raised this issue with the FBR and Nosheen Javaid played vital role for amending the relevant law. Monam Sultan President Lahore Tax Bar Association said that tax bar always supports FBR and ‘we will continue our support further’.
— Exclusive Customs Today photo
Taxpayers should use latest technology to file tax returns: Member Nausheen
President Lahore Chamber of Commerce and Industry Almas Haider said that ease of doing business is more necessary in Pakistan and ‘we expect that Naya Pakistan will support the business community and create more opportunities for business’. Meanwhile, Federal Board
FbR member Nausheen Javed
of Revenue (FBR) Member Taxpayers’ Audit Nausheen Javaid Amjad has announced that all those taxpayers automatically selected for audit u/s 214-D due to late Tiling of returns for Tax Year 2015, 2016 and 2017, have now the opportunity for automatic closure of audit u/s 214E by paying the penalty or higher
tax than previously Tiled return, whichever is applicable under the law. She was addressing a gathering of taxpayers, tax lawyers and tax practitioners at Lahore. Both the events were attended among others by President of All Pakistan Tax Bar Association Abdul Qadir Memon, presidents and
vice-Presidents of Lahore and Faisalabad Tax Bar Associations as well as a large number of lawyers, chartered accounts and tax practitioners. Ms Nausheen Javaid Amjad explained that the salaried persons or those whose income falls under the category of FTR/PTR have to pay penalty only to close their audits.
ImF wants up to Rs100b increase in FbR tax collection ISLAMABAD
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he International Monetary Fund (IMF) has asked the Pakistani government to increase FBR’s tax collection up to Rs100 billion in a bid to materialise the real potential of tax collection machinery. “The IMF wants to increase the FBR target by Rs70 to Rs100 billion as discussions are underway to Tinalise the target in line with the real potential of the FBR. The IMF mission has shown dissatisfaction over the FBR move to broaden the tax base through issuing notices to high net worth value individuals,” ofTicial sources
said. “The Tinancing of the programme will be standing in the range of $5 to $6 billion as it is the due amount Islamabad has to pay back to the IMF on account of previous loans which were obtained during the tenure of last PML-Nled regime,” said the ofTicial. The ofTicial sources said that the ongoing crackdown launched by FBR against potential tax evaders had so far proved eyewash because so far out of total sent out tax notices to few hundreds, over 40 percent notices returned back because of invalid postal addresses. The generated tax demand could actually bring few billion rupees maximum so there would be no real potential for increasing tax to GDP ratio through this ongoing cam-
paign. The FBR will have to change its policy to make broadening of tax base exercise as successful. The IMF team knew very well that the FBR sent out 300,000 tax notices during the last IMF programme in three years but it fetched only cou-
ple of billion of rupees into national kitty as taxes. When the FBR ofTicials were reminded about failure of last scheme which was launched under IMF programme from 2014-15 to 2016-17, the ofTicial said that this
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programme was not pursued effectively that resulted into meeting failure. An FBR ofTicial said that the Ministry of Finance would now Tinalise FBR tax collection target as the tax machinery did not even know how to collect the original target of Rs4398 billion at a time when the tax machinery was facing a shortfall of around Rs60 billion in Tirst four months (July-Oct) period of the current Tiscal year. “Instead of downward revision in tax collection target, the IMF wants jacking up the FBR target up to Rs100 billion on the ground that the government raised duties in supplementary budget so the FBR must collect in order to materialise its real potential,” sources quoted the IMF team as saying during the parleys.