Daily on www.customstoday.com
Find us on
PAkIStAN’S FIRSt INDePtH NewSPAPeR oN CUStoMS
ABC Certified vol 2 Issue No. 30
karachi, tue August 12 - Mon August 18, 2014
weekly
Regd. No, MC-1381
DoUBlINg exPoRtS
Commerce Minister Khurram Dastgir decides to appoint local and foreign experts to assist the government to double the trade volume | See PAge 03 | StARtINg BoAt SeRvICe
ISLAMABAD
MUHAMMAD FAIZAN www.customstoday.com
Ports and Shipping Ministry takes all stakeholders into confidence to launch KarachiDubai speedy boat service. See PAge 05 | ColleCtINg tAx At SoURCe
Senator Rehman Malik proposes to collect the tax at source to avoid tax evasion by business community and land lords. | See PAge 06 | PReSSURIZINg Dg I&I
TCS and Smart Zone Company pressurise DG I&I Lutfullah Virk through different channels in smuggling scandal. | See PAge 02 |
I
n an attempt to retrieve $200 billion, FBR has decided to tighten the noose around those Pakistanis who stashed this money in Swiss banks. FBR acting Chairman Shahid Hussain Asad told Customs Today that a team of FBR experts will visit Switzerland on 24th of this month to pursue Pakistan’s efforts to recover untaxed billions of dollars of Pakistanis stashed illegally in Swiss banks. He said that the team will formally initiate negotiations with the Swiss authorities for possible recovery of billions of dollars belonging to Pakistanis in foreign accounts.
“The FBR team will sign a dual tax agreement with Swiss government which would help FBR ofRicials to recover Pakistani money kept illegally in Swiss banks. FBR team would also request Swiss ofRicials to provide names and addresses of account holders, after that FBR will start grand operation against these account holders,” FBR acting Chairman explained. Moreover, FBR has also decided to facilitate and honor those account holders who voluntarily withdraw their money from Swiss banks and transfer to Pakistan. The FBR acting Chairman said that recovery process could be lengthy and might take a few years because of its complexity. It is assumed that Pakistani nationals have deposited over
FBRteamlikelyto signadualtax agreementwith Swissgovtwhich wouldhelpFBR officialstorecover Pakistanimoney keptillegallyin Swissbanks
$200 billion in Swiss banks. One of the directors of Credit Suisse AG Bank has stated that $97 billion from Pakistan are deposited in his bank. The FBR will seek help through the new Swiss law “The Restitution of Illicit Assets Act 2010 (RIAA)” to exchange conRidential information about the black money stashed in Switzerland’s banking system. FBR team is expected to Rly to Switzerland on 24th of this month where Pakistan would have to prove that the money deposited in Swiss banks by its nationals is untaxed. Meanwhile, Federal Minister for Finance Mohammad Ishaq Dar said there is no guarantee to bring back billions of dollars deposited by Pakistani nationals in Swiss banks.
Price Rs. 50.00
02
www.customstoday.com
NATIONAL
AUGUST 12 - AUGUST 18, 2014
Coast guards seize 8 tankers of smuggled Iranian diesel worth Rs28m
KARACHI: Pakistan Coast Guards seized eight oil tankers full of smuggled Iranian diesel in a raid. Pakistan Coast Guards on a tip-off took action against smugglers and 8 oil tankers having 280,000 liters of Iranian diesel were taken in to custody from RCD Highway. Information was received by undisclosed sources that Iranian diesel was being smuggled through RCD Highway following which PCG personnel started checking on Highway and detained 8 oil tankers, while the market price of oil is said to be Rs 28 million.
ONOs issued against Nadeem Enterprises, Unity Freight, others he Additional Collector of Customs and Collectorate of Customs Adjudication-II have issued Order-inOriginals (ONOs) to M/s RustamTowel (Pvt) Ltd, M/s Friend Export (Pvt) Ltd, M/s Nadeem Enterprises, M/s Unity Freight International and M/sViraniTraders on mis-declaration, fiscal fraud and smuggling of poppy seeds under cover of polyester fabrics export. According to details, the exporters attempted to export huge quantity of Poppy seeds to Germany in the garb of polyester, cotton and dried printed fabric through two export goods declarations No KEXP-SB-15663 and KEXP-SB-14874 and violated the Section 2(s), 16, 32(1), 32(A) (1), 131 and 178 of the Customs Act, 1969 and punishable under clauses 8(i), (14), 14A, 45, 74, 77 and 86 of the Section 156(I) of the Customs Act, 1969 read with the Serial No.8 of Schedule II of the Export Policy Order 2013-14, Section 3(1) read with Section 3(3) of the Imports & Exports (Control) Act, 1950. Sources informed CustomsToday that exporters tried to export poppy seeds weighting 27.81 metric tons packed in 1119 bags under PCT Heading 1207.9100 costing Rs 2.78 million and 16.72 metric tons of poppy seeds packed in 344 bags valuing Rs 1.67 million in garb of polyester, cotton, dried printed fabric.The FBR Directorate General of Customs Intelligence and Investigation had seized the consignments at KICT,WestWharf and made seizure report accordingly. Subsequently, the Additional Collector of the Collectorate of Customs Adjudication-II after conducting three hearings with the aforementioned parties in his judgment stated that the charges leveled in show-cause notices stand established and imposed three times penalty on the actual amount of Rs 2.78 million and Rs 1.67 million, which makes Rs 8.34 million and Rs 5.01m respectively. According to the said ONOs, the exporters must have to deposit Rs 13.35m to national exchequer. —CT Report
T
Customs to introduce X-Series for air traffic akistan Customs is going to introduce latest X-Series by the beginning of the year 2015 for making the connectivity between airports and Pakistan Customs more effective in terms of filing Import General Manifest (IGMs). A FBR sources confirmed Customs Today that the Pakistan Customs with the collaboration of Emirates Airlines and International AirTransport Association (IATA) will start its working on the introduction of X-Series in air traffic. Replying to a query, it further said that the latest series would be active from January, 2015 and during the said timeframe Emirates Airline would test the transferring of coded messages between airlines and Pakistan Customs. —CT Report
P
TCS, Smart Zone case: Customs submits challan against Hamdani, Shakirullah ISLAMABAD
CUStoMS toDAY RePoRt www.customstoday.com
T
he Customs Intelligence and Investigation (I&I) has submitted the challan in customs court against TCS CEO Saqib Hamdani and Smart Zone Company owner Shakirullah, declaring them accused of smuggling. As per details, during the hearing of TCS and Smart Zone Company smuggling case in customs court of Islamabad customs judge Muhammad Ahmad Farooqui, Smart Zone Company owner Shakirullah requested the court to delay the hearing as his lawyer was out of country and unable to proceed the case. However, customs ofRicials strongly opposed the request that hearing should not be delayed at any cost. Despite of that opposition from customs ofRicials, court allowed Shakirullah to appear before the court on August 26 along with his lawyer. On the other hand, court had ordered TCS CEO Saqib Hamdani to appear in the court on August 11 for the hearing of his request for extended bail. However, Customs I&I Deputy Director Engineer Shahid Jan was hopeful that culprits could not get respite from the court. Sources informed Customs Today that Customs authorities will request judicial remand of culprits on next hearing of the court. "Customs ofRicers had prepared the case after intensive investigations and there are chances of punishment by the court
Dg I&I pressurized to bury the case ISLAMABAD
CUStoMS toDAY RePoRt www.customstoday.com
D
irector General Customs Intelligence and Investigation (I&I) Lutfullah Virk has ordered Deputy Director Customs Shahid Jan to take strict action as per law against TCS and Smart Zone Company for their alleged involvement in smuggling. As per details, owners of TCS and Smart Zone companies had tried to put pressure on DG I&I through different channels but he rejected any illegal pressure and ordered Deputy Director to deal with the case as per law. Moreover, Customs authorities have decided to investigate other businesses of these companies. These companies are reportedly doing business of mobile import along with other side businesses. A source told Customs Today that owners of TCS and Smart Zone through higher authorities tried to force DG I&I to change his decision regarding investigation but DG I&I demanded the proof for the legitimacy of the goods caught in warehouse of TCS.
Mobilink served show cause notice for tax evasion KARACHI
CUStoMS toDAY RePoRt www.customstoday.com
T
he Collectorate of Customs Adjudication-I has served show cause notice to M/s Pakistan Mobile Communication Limited (Mobilink) for its alleged involvement in mis-declaration and huge evasion of customs duty and other taxes. The company evaded about Rs 6.99 million in share of customs duty, sales tax, additional sales tax, regulatory duty and withholding tax. According to details, the Model Customs Collectorate of Port Muhammad Bin Qasim on a credible tip intercepted an imported consignment of M/s Pakistan Mobile Communication Limited cleared through Green Channel vide GD
No.KPPI-HC-1778 on 8 July, 2014 and during examination found that the importer was attempted to clear goods by mis-declaration through Green Channel and evaded legitimate duties with the connivance of its clearing agent M/s SASPAK Cargo (Pvt) Limited. Later, during the course of examination it was ascertained that the imported goods were DC Cabinet Air Conditioner DC 48 Volt designed for the telecom and other industrial equipment cooling application which were speciRically classiRiable under PCT heading 8415.8200 chargeable to customs duty @25 per cent, regulatory duty @5per cent besides other taxes, whereas importer tried to clear under the vague description that Cellular Infrastructure Equipment (HW) for telecom sector consisting of outdoor
power cabinet (EAB-PSC23MES) 50 pieces and sought release under PCT Heading 8517.7000 attracting CD @10 per cent, ST @3 per cent and WHT @5.5 per cent. According to the MCC Port Muhammad Bin Qasim, the total declared value is US$ 1, 38,595 CFR equivalents to Pakistani Rs 13.8 million and the importer paid total duty and taxes Rs5.55 million. Subsequently, the Collectorate of Customs Adjudication-I has issued hearing notice to M/s Pakistan Mobile Communication Limited. It is pertinent to mention here that the M/s Pakistan Mobile Communication Limited has already requested to the Collector of Customs Adjudication for joint examination of the imported consignments in the presence of their company representatives.
PIA, Shaheen Airline, Air Blue take stay order he Pakistan Customs has been trying to recover the legitimate tax money from Pakistan International Airlines (PIA), Shaheen International Airlines, Air Blue and a Chinese cellular company. An officer in Legal Department of Pakistan Customs has revealed while sharing his views with Customs Today that billions of rupees were due on private, national airlines and a Chinese cellular company and Pakistan Customs had taken up the matter in Sindh High Court (SHC). “These non-tax payer airlines and Chinese cellular company have taken stay-orders from SHC in their cases,”he added. He further said that those stayorders could prolong by decades and create impediment in revenue collection. —CT Report
T
www.customstoday.com
NATIONAL 03
AUGUST 12 - AUGUST 18, 2014
ICCI urges govt to improve tax structure
ISLAMABAD: ICCI has demanded the government to improve tax structure for developing business and investment. As per details, Acting President, Islamabad Chamber of Commerce & Industry Muhammad Ali Mirza said that the existing tax structure discourages investment and encourages rent seeking. “A better tax system would help to improve economic growth of the country, but unfortunately, the present tax system promotes rent-seeking.
FinanceMinistryallset foramendingFERA Act,repealingEPFO he Ministry of Finance has made full preparations to introduce Bill to amend the Foreign Exchange Regulation Act, 1947. Similarly, Ministry is also all set to introduce another bill to repeal the Equity Participation Fund Ordinance, 1970. Both the bills had been very effective in the past and had been introduced with the purpose of streamlining economic sector in the country. Sources privy to Finance Minister, disclosed to CustomsToday that Ministry had prepared drafts of legislations for above-mentioned purpose and Finance Minister Ishaq Dar was likely to table both the bills in the Lower House of Parliament today (Monday). These bills will be titled as Foreign Exchange Regulation (Amendment) Bill, 2014 andThe Equity Participation Fund (Repeal) Bill, 2014 respectively after the amendment and repeal of the latter one. However, when contacted the officials concerned about possible impact of new legislation on economy, tax collection, small business and other sectors, they declined of having deep insight in this connection. It is pertinent to note here that that Equity Participation Fund (EPF) meant to promote and accelerate growth of private sector small and medium industrial entrepreneurs. The EFP was established on January 2, 1970 through an ordinance with a paid up capital of Rs 50 million which was subsequently increased to Rs 155 million. The primary objective of establishing EPF was to foster and accelerate growth of small and medium sized industry in the private sector.The fund was managed and administrated by the Industrial Development Bank of Pakistan (IDBP) in the past. —CT Report
T
Dastgir seeks local, foreign experts’ help to double exports Commerce Ministry examined the future potential trade products and new trade routes to sell Pakistani products. After the examination of successful trade models of world, some modifications will be made in commerce policies ISLAMABAD
State Life to have new Chairman soon: Dastgir
CUStoMS toDAY RePoRt www.customstoday.com
F
ederal Minister of Commerce Engineer Khuram Dastgir has decided to appoint local and foreign commerce experts who will assist the government to double the trade volume of the country. Local experts include two former Governors of State bank Dr Ishrat Hussain and Shahid Kardar along with local economic analysts. Federal Minister has asked them to assist government with their experience and expertise in increasing country's exports volume. Moreover, Commerce Ministry has also examined the future potential trade products and new trade routes to sell Pakistan products. After the examination of successful trade models of world some modification will be made in commerce policies. Federal Minister said that government will utilize its all energy on marketing Pakistani products in foreign markets. He also met former Governor of State bank Shahid Kardar to seek his help in bringing foreign experts for assisting Commerce Ministry. In meeting Federal Minister has told him that Commerce Ministry has been in contact with FBR, Finance Ministry and concerned provincial institutions to assist
ISLAMABAD
CUStoMS toDAY RePoRt www.customstoday.com
ederal Minister of Commerce Engineer Khurram Dastgir has assured the administration of State Life Insurance Corporation Limited that decision on appointment of Chairman and board members will be taken soon on priority basis. As per details, Federal Minister Khurram Dastgir during a meeting to examine the half-yearly performance of State Life Insurance Corporation Limited said that Corporation needs to broaden its operations to all over the country. He also said that it is need of the hour to make State Life most innovative and reliable insurance company of the world. He emphasized to widen insurance operations for overseas Pakistanis and to strengthen the policies of company. Mr. Dastgir also guaranteed that latest technology will soon be introduced to improve the corporation and its operations. He also instructed to remove the officials who show poor performance during job and ordered to replace them with hardworking and dedicated team of workers.
F
them in efforts to increase export and trade volumes of Pakistan. Shahid Kardar told Federal Minister that to increase trade volume
we need to increase diversity of our export products and should seek Middle Eastern trade routes for our products.
www.customstoday.com
NATIONAL
AUGUST 12 - AUGUST 18, 2014
Mango export: Multan gets first locally manufactured HwtP
Multan: Federal Minister for National Food Security and Research Sikandar Hayat Khan Bosan has inaugurated the locally manufactured hot water treatment plant for mango processing in Multan. Talking to Customs Today he said that after the cancellation of two mango consignments from Europe, government is taking precautionary measures and will not allow any mango grower to export mango without hot water treatment.
SIALKOT
ZAFAR MAlIk
www.customstoday.com ederal Board of Revenue (FBR) has decided to bring about 10,000 small traders and businessmen under the tax net and to collect tax from 85000 inactive NTN holders in Gujranwala region. As per details, the FBR has formulated six special teams for each of the six districts, Sialkot, Narowal, Gujrat, Mandi Bahaud Din, Hafizabad and Gujranwala which were going door-to-door for motivating people to come under tax net besides briefing them about the trade related perks and policies of FBR. According to a senior FBR official, there were about 1,25,000 National Tax Number (NTN) holders in Gujranwala region, out of which 40000 NTN holders were regularly deposit their tax returns while the rest 85000 NTN holders have become inactive and the FBR was issuing them the special notices to pay their payable taxes. The official added that FBR has also issued the special directives to the Regional Tax Office (RTO) Gujranwala to also bring the people under the tax net who purchase, sold the vehicles and properties. These people should also manage their accounts, showing the details that if they paid their taxes. —CT Report
F
FBR asks customs officers to declare assets he Federal Board of Revenue (FBR) has directed Inland Revenue officers and Customs officers to declare their assets details before August 15. As per details, FBR issued a notification to all regional tax offices and custom offices on July 24 to declare their assets before July 30 but due to Eid ul Fitr holidays the date extended further to August 15 to submit their assets details. The customs employees were not taking keen interest in filing their own tax returns which has been a serious concern for FBR as to accumulate taxes from their department employees. During his exclusive talk with Customs Today Commissioner Inland Revenue Multan Yasir Khan said that if FBR and customs employees would also pay their due taxes, it will promote tax culture in country. He said that officers of Multan have been paying their due taxes on time. Sources informed that some tax officers has not been taking any interest in revealing their assets voluntarily even after the instructions from FBR’s extension of due date. —CT Report
T
karachi Customs Collectorates collect Rs49.5b revenue in July
Customs Appellate Tribunal dismisses MCC-Exports appeal against M/s Cresox
MCC Appraisement-East collected total revenue of Rs 13457 million and MCC Appraisement-West collected Rs 16720.7million revenue in first month of FY 2014-15 KARACHI
CUStoMS toDAY RePoRt www.customstoday.com
T
he Model Customs Collectorates (MCCs) of Appraisement-East, West and Port Qasim have collected Rs 49.5 billion revenue in Rirst month of current Riscal year. As per details, the Model Customs Collectorate (MCC) of Appraisement-East has collected total revenue of Rs 13457 million in the Rirst month of FY2014-15 in share of customs duty, sales tax, income tax and federal excise duty. The MCC Appraisement-East has collected a sum of Rs 3997.75 million in share of customs duty, Rs 6830.49 million in share of sales tax, Rs 2548.07 million in share of income tax and Rs 80.69 million in share of Federal Excise Duty (FED). Moreover, the Model Customs Collectorate (MCC) of Appraisement-West has collected Rs 16720.7million revenue in Rirst month of FY 2014-15. The MCC-Appraisement-West has collected sum of Rs5882.23 million in share of customs duty, Rs 7668.30 million in share of sales tax, Rs 3066.09million in share of income tax and Rs 104.06million in share of FED. The Model Customs Collectorate (MCC) of Port Muhammad Bin Qasim has collected revenue of Rs
Collector Muhammad Saleem
Collector Najeeb ur Rehman Abbasi
MCC-Port Qasim collected an amount of Rs 3861.2 million in share of customs duty 19313 million by the end of Rirst month. The MCC-Port Muhammad Bin Qasim has collected an amount of Rs 3861.2 million in share of customs duty, Rs 12781.7 million in share of sales tax; Rs2516.84 mil-
he Customs AppellateTribunal, Bench-III has dismissed the appeal filed by the appellants i.e. Deputy Collector of Customs, Model Collectorate of Customs (Exports) against the Orderin-Original (ONO) No.26 issued by Collector (Adjudication) against M/s Cresox (Pvt) Limited. According to the details, the Customs AppellateTribunal directed the authorities concerned of MCC-Exports to renew the license of the respondents upon receipt of their application subject to furnishing of the securities as required under the rules. “The appellants are further directed to introduce a proper monitoring system as per Rule 10(2) read with Appendix-V of the Rules and if that brings out any procedural mistake or a bonafide error in the operation of Export Oriented Unit (EOU) Scheme by the exporters, they may be educated and facilitated by providing them timely advice for necessary rectification in the light of the requirements of the Rules.The appeal stands dismissed”. Earlier, a contravention report was forwarded by MCC-Exports to the Collectorate of Customs (Adjudication-II) against M/s Cresox (Pvt) Limited for the alleged violation of clauses (f), (i) and (j) of sub-rule (1) of the rule 3 of SRO 327(I)/2008 read with condition (2) of the license requiring recovery of duty and taxes amounting to Rs29,575,859 under section 32(3A) of Customs Act, 1969 besides penal action against the licensee under clause (10A) and 14 of Section 156(1) of the Customs Act, 1969 for getting import clearances in excess of face value of license. Consequently, a show cause notice was issued to Respondent i.e. M/s Cresox (Pvt) Limited for recovery of duty/taxes and imposition of penalty under the provisions of law. —CT Report
T
— Exclusive Customs Today photo
Gujranwala region: FBR to bring 10,000 evaders under tax net
— Exclusive Customs Today photo
04
lion in share of income tax and Rs153.31million in share of Federal Excise Duty. It is important to mention here that FBR has not yet assigned a separate target to these ofRices.
FIRagainstappraiser: CustomsI&Inotonboardwithcommittee KARACHI
CUStoMS toDAY RePoRt www.customstoday.com
T
he 6-member committee formed to investigate the aspects of First Information Report (FIR) lodged by the Directorate General of Customs Intelligence and Investigation against the appraiser Sarfaraz Bangash Zai in MCC Appraisement-West on his alleged involvement in clearing the consignments of oil by using unfair means, has yet to start its working due to absence of basic information of the case. Sources informed Customs Today that the Directorate of Customs Intelligence and Investigation Karachi has not yet provided its Rind-
ings to the committee on which it had registered an FIR against the appraiser. In this regard, when contacted the chairman of the committee Principal Appraiser Shaheen Farooqui has conRirmed that the Directorate General of Customs Intelligence and Investigation has not been cooper-
Custom I&I karachi has not yet provided its findings to the committee about registering FIR against appraiser ating with the committee members as he has not yet provided its Rindings on the basis it had registered an FIR to the designated committee. One of the members of the Committee while sharing his views with Customs Today said that the com-
mittee head has not yet called for a meeting of committee’s members, as none of the substance regarding the FIR yet to be received to committee. It is pertinent to mention here that the Directorate General of Customs Intelligence and Investigation Karachi had registered an FIR against appraiser, Sarfaraz Bangash Zai on July 25. Subsequently, the appraisers’ association of Pakistan Customs on next day held a meeting in which it has been decided to form a 6-member committee comprising Principal Appraiser Shaheen Farooqui, Javed Akhtar, Mir Mansoor, Dost Muhammad and Haris Khan who would review the grounds on which the FIR had been lodged.
www.customstoday.com
NATIONAL 05
AUGUST 12 - AUGUST 18, 2014
Saudi Customs bans Indian pepper
JEDDAH: Customs authorities of Saudi Arabia have decided to impose ban on the import of all types of pepper from India. As per details, Saudi customs have imposed an import restriction on pepper from India on presence of high levels of pesticides. Chili peppers are one of India’s largest foreign currency earners and India has exported 181,500 tons of chilli peppers worth $3 million between April and November last year.
All set for karachi-Dubai speedy boat service: Michael Ports and Shipping has taken all the stakeholders including PFVA and APMEPA on board regarding speedy boat service ISLAMABAD
MUHAMMAD ARSHAD www.customstoday.com
Mobile phone companies deposit Rs162,149m gSt obile phone companies have deposited Rs 162,149 million on account of GST during the last five years. Cellular companies paid highest Rs 43,202 million in 2011 and the lowest Rs 16,930 in 2013. According to official data available with this scribe, cellular operators deposited total Rs 162,149 on account of GST during last five years up to April 2014. The year wise break-up is as follows Rs 26,306 million, Rs 29,886m, Rs 43,202m, Rs 42,326m, Rs 16,930m and Rs 3,499 million in 2009, 2010, 2011, 2012, 2013 and 2014 up to April respectively. Statistics further reveal that no case of tax evasion surfaced during this period except the case of alleged evasion of tax on inter connect charges. The matter is pending before the Supreme Court. —CT Report
M
Rupee devalues by 47.1pc against dollar akistani Rupee devalued approximately 47.1% against US Dollar during period from 2008 to 2013. Rupee met with the worst depreciation in the fiscal year 2009 when it was devalued up to 16.0% and the lowest was in 2011 which was 0.5% only. Official documents available with CustomsToday show that Pak rupee was victim of depreciation against dollar in time span from 2008 to 2013 and it was approximately 47.1%. The documents further reveal that year wise depreciation was 11.7%, 16.0%, 4.7%, 0.5%, 9.1% and 5.1% in 2008, 2009, 2010, 2011, 2012 and 2013 respectively.The documents said that depreciation of PKR during the period under consideration was primarily a reflection of weak balance of payment position. —CT Report
P
— Exclusive Customs Today photo
T
he Fish and Rishery products saw an increase of 15.68% during last FY2013-14 which was 12.25 % higher than the FY2012-13. This record increase in export of Rish and Rishery products from Pakistan had made export earnings of US$ 367.472 million which were above the target of US$340.00 million Rixed by Marine Fisheries Department. According to Ministry of Ports and Shipping during the FY2013-14 the Rish & Rishery products exports valued US$ 367.472 million (155,671 metric tons). Whereas, during the FY2012-13 total exports were US$317.652 million (138,680 metric ton). The Federal Minister for Ports and Shipping Kamran Michael said that the main reason for this record increase in Rish & Rishery products was the lifting of European Union (EU) ban on import of Rish & Rishery products from Pakistan after six years. In an exclusive talk with Customs Today he said that export from two processing plants has been allowed by the EU and permission for few more processing plants is anticipated. He said that EU suspended import of Rish & Rishery products from Pakistan on April 12, 2007 on account of certain deRiciencies pointed out by the board of Rishing vessels Karachi Fish Harbour and processing plants by Food & Veterinary OfRice (FVO) of European Commission (EC) during their inspection visit held from January 2226, 2007. He further added that Marine Fisheries Department, in collaboration with all the relevant stakeholders has undertaken necessary corrective
measures to rectify the shortcomings as a result the EU has allowed export of Rish & Rishery product to 27 nations of the European Union. Moreover, the Minister described
that combating smuggling and initiating legal export of fresh water Rish to Afghanistan through Torkham border were also the reasons behind record increase in export both in
quantity and price. “In addition a new development of establishment of regional ofRices & testing laboratories of Marines Fisheries Department at Gwadar (Balochistan) at a total cost of Rs 46.00 million has been approved” he observed. Meanwhile, the preparations have been completed for launching speedy boat service between Karachi and Dubai to increase Pakistani exports. The main objective of speedy boat service was to export perishable edible items, fruits, vegetables, meat and others to Dubai on cheaper rates, almost half than air service. A speedy boat equipped with air conditioned container will cruise at the speed of 45 nautical miles per hour, almost three times more than a ship and cover distance between Karachi and Dubai in 24 to 28 hours. The Rinal decision in this regard is likely to be made in a high level meeting scheduled to be held between Federal Minister for Ports and Shipping and Chairman Pakistan National Shipping Corporation (PNSC). The sources told Customs Today that Ministry of Ports and Shipping had taken all the stakeholders including ‘All Pakistani Fruit & Vegetable Exporters’, Importers and Merchants Association (PFVA) and ‘All Pakistan Meat Exporters & Processors’ Association (APMEPA), onboard regarding speedy boat service. The sources said that Pakistani exporters had welcomed Ministry’s decision and hoped record increase in exports to Dubai, because the exporters would make handful proRit due to decreased cost of transportation of their products. The sources further revealed that plan had been devised and after Rinal decision, implementation phase will start and hopefully the service would be inaugurated in next one month.
PNSCtosignMoUwithSrilankanportsauthority ISLAMABAD
CUStoMS toDAY RePoRt www.customstoday.com
A
memorandum of understanding (MoU) will be signed between the Pakistan National Shipping Corporation (PNSC) and Sri Lankan Ministry of Highways, Ports & Shipping during upcoming visit of Sri Lankan President Mahinda Rajapaksa to Pakistan. The Sri lankan Minister of Highways, Ports & Shipping Rajapaksa is due to visit Pakistan from August 21. Under the said MoU the Sri Lankan Ministry of Highways,
Ports and Shipping will give business to PNSC and will charter tankers and ships for imports and exports through PNSC. This MoU will bring a great boom in the business of PNSC in the coming days and will increase economic activity which will further increase foreign exchange, capital flow and revenue generation. Sources told Customs Today that in result of dynamic steps taken by the concerned ministry, PNSC has improved its reputation among international investors and its share rate has also increased to Rs 67 per share at Karachi Stock Exchange.
Under MoU, Sri Lankan Ministry of Ports and Shipping will give business to PNSC to charter its tankers and ships for imports and exports
It is important to mention here that PNSC deals in transportation of dry bulk and liquid cargoes globally and has been listed on the KSE since 1980. The PNSC owns a fleet of double hull tankers, panama bulk carriers, Superamax, Handymax and Handysize bulk carriers, all modern vintage, having a total carrying capacity of over 642 thousand tonnes of deadweight. It is also learnt that Sri Lankan Ports Authority (SLPA) has as per its vision 2020 aspires to achieve target cargo handling of 200 million tonnes, earn revenue of $ 1 billion and $ 10 billion Ports investments within the ports.
— Exclusive Customs Today photos
06
SPECIALREPORT
www.customstoday.com AUGUST 12 - AUGUST 18, 2014
www.customstoday.com
SPECIALREPORT 07
AUGUST 12 - AUGUST 18, 2014
ISLAMABAD
M FAIZAN & M ARSHAD www.customstoday.com
C
hairman Senate Standing Committee on Planning and Development and former Interior Minister Rehman Malik counted a foolproof E-Rilling and E-tax collection system as the sole solution to all the problems confronted by the country’s tax collection apparatus. “In my point of view, if strenuous efforts are made, our tax collection system can be upgraded in maximum three years; every new company must be referred to the Federal Board of Revenue at the time of registration and no company must be allowed to operate without linking to a centralized system,” Senator Abdur Rehman Malik elaborated while talking to the Customs Today during an exclusive interview. He stressed that tax must be collected at source to avert any possibility of evasion, adding that some elements in the business community and landlords were involved in tax evasion. “Look on my part, I am ready to give presentation to FBR on tax evasion and loopholes in the tax collection as no country could survive without revenue collection,” he offered, adding that in the West and developed countries no one could think of tax exemption. “In Pakistan tax policies and laws are usually “twisted and amended” for the beneRit of blue-eyed personalities,” he regretted.
To a question about the ‘narrow and stagnant’ tax net despite identiRication of 3.2 million potential taxpayers, Rehman Malik declared that no one was ready to pay tax in Pakistan and it had become a national tendency and behaviour. He questioned the non-inclusion of agriculture sector in tax net despite the fact that agriculture sector was Rlourishing by leaps and bounds, adding that in such circumstances how the tax net could be expanded. The Senate Standing Committee on Planning and Development chairman suggested that the government must announce incentive based tax collection system to encourage the FBR staff for showing better performance. While commenting on government’s efforts to check depreciation in rupee against dollar, he said that the government had borrowed three trillion domestically which would result in high inRlation, price hike besides other repercussions, adding that the government, however, was justiRied in getting loans due to its international obligations regarding debt servicing. Rehman Malik proposed that baggage of passengers must be declared duty-free at airports because nation had to bear huge losses due to heavy duties which were otherwise did not meant for going into national kitty because heavy duty rates lure people to seek midway and agents often play key role in duty evasion. “Our Revenue Department is still running with centuries-old system and the main problem faced by the tax system is that implementation of the system has been solely left over to bu-
reaucrats,” he pointed out, adding that the tax machinery could only be improved through the introduction of incorruptible mechanism. He described fudging the Rigure as another major problem that was threatening the national economy, adding that this very act by government departments often misled the government about available resources and pace of development and progress, restricting the government from devising accurate, correct and practicable development plans as well as Rix achievable targets for development and revenue collection. “In the past Rigure fudging harassed the government and entire nation and defamed Pakistan internationally, creating suspicions and doubts about Pakistani economy,” he recalled, adding that every government devised Riscal policies in the best interest but factually the size of Pakistan economy was hampering its progress. “Look 65% of the total budget goes to debt servicing either domestic or international, ten percent out of remaining 35% is pilfered; Moreover, six to seven billions dollars have to be paid as international obligations by every government which affects economic performance of the country,” he detailed. Rehman Malik emphasised that it was time the government managers sat together and mull whether or not the FBR had will or capacity to widen tax net, adding that after a thorough assessment the government should go allout and overhaul the entire revenue collection system.
PROFILE Senator Rehman Malik has been one of the key members of kitchen cabinet of former President Asif Ali Zardari during the PPP regime and even today he is being considered as one of the close conRidants of Mr Zardari. Throughout the PPP government, he remained Interior Minister and performed up to the satisfaction of party leadership. Currently besides member of the Upper House of the Parliament, Rehman Malik is Chairperson of Senate Standing Committee on Planning Development and Reform, member Standing committee on Information Technology and Telecommunication, Interior and Narcotics Control and States and Frontier Regions. He is considered an expert on security related issues, however, it was a matter of surprise for the team of Customs Today that he had full grip over economic, Rinance and tax related issues. He also disclosed to the Customs Today team that his leadership used to grace his viewpoints on economic matters during cabinet meetings.
Government must devise incentive based tax collection system to encourage FBR staff
www.customstoday.com
08 EDITORIAL
AUGUST 12 - AUGUST 18, 2014
Founder & Chairman Zulfiqar Ali Editor Rahil Yasin editor@customstoday.com.pk For advertising & subscription marketing@customstoday.com.pk +92-308-2106195 www.customstoday.com Phones: 042-35781643-4, Fax: 042-35781645 Address: 627, Siddiq Trade Centre, Gulberg, Lahore
eDItoRIAl
Parleys with Swiss authorities
P
Pakistan and Swiss authorities are going to hold parleys to renew existing agreement on avoidance of double taxation on August 25 and 26 in Switzerland. Pakistan’s delegation led by Chairman FBR Tariq Bajwa will visit Switzerland for making efforts to insert clauses that could help Pakistan to bring back a whopping amount of $200 billion lying into Swiss bank accounts. It is generally believed in Pakistan that the alleged corrupt elements had earned dirty profits and parked that money into safe heavens of Swiss accounts so it would not be an easy task to bring back such lofty amounts into the country. Although, the FBR team would be doing its homework to convince the Swiss authorities for sharing this information under avoidance of double taxation agreement but it would be appropriate for Pakistani authorities to send officials of State Bank of Pakistan in order to ensure exchange of information related to bank accounts. Pakistani authorities believe that this task could take four to five years so one should not expect any positive results with blink of an eye on this front. What kind of homework is required to convince the Swiss authorities as some relevant experts replied that Pakistan would have to get information about account holders through informal channels to ascertain that who put money in Swiss accounts in order to prove their point in formal parleys with Swiss authorities. One such example was available in case of Germany in recent years as Authorities in the German state of North Rhine-Westphalia had bought a CD from Switzerland containing wealthy Germans’bank details as part of a drive to identify tax evaders. The CD contains the names and bank details of some 1,000 wealthy Germans who are customers of the Zurich branch of Coutts, the private banking arm of Britain’s Royal Bank of Scotland best known as banker to Queen Elizabeth. They had bought CDs containing Swiss banking data from whistleblowers to help identify German tax evaders. This led thousands of Germans to declare their financial holdings to avoid risking jail sentences. North Rhine-Westphalia paid €3.5m to get this CD. Pakistani experts working in anti corruption watchdog NAB argued that they did not know how that renewal of avoidance of double taxation agreement would help Islamabad to identify tax cheaters. They thought that some kind of protocols needed between central banks of both countries through which information regarding account holders could be shared with each others. If the desired information is obtained by the FBR authorities prior to their visit of Switzerland through informal channels, it could help Pakistan in a major way to bring back $200 billion lying into Swiss accounts that could change the destiny of nation with one stroke. This wish list cannot be fulfilled without doing proper homework so this is the time to present strong case on the basis of solid facts in front of Swiss authorities leaving no excuse for them to decline sharing information about account holders of $200 billion belonging to Pakistani nationals.
Risingpoliticaltemperature&needforeconomicstability ISLAMABAD
SM HAIDeR
www.customstoday.com
T
he PML (N) led government has ruled out possibility of minus one formula to accept the demand of PTI from Prime Minister Nawaz Sharif to tender his resignation and hold mid-term polls in the country. Federal Minister for Finance Ishaq Dar had made it clear that the demand of resignation of PM was out of question and termed the PTI move as “unconstitutional” on the part of the opposition party. Prime Minister Nawaz Sharif had already kick-started consultation process with all political parties to find out amicable solution of existing political mess arising out in the context of Azadi March announced by the PTI on eve of Independence Day in the federal capital.
Mr. Dar, who also assumed the slot of head of parliamentary panel of election reforms, made it clear that the opposition should forget about its unconstitutional demand by asking the elected PM to tender resignation. The international reserves, which had nosedived to $7 billion, had again risen to $14 billion in first year rule of the government. All international financial institutions were agreed on this point that Pakistan had achieved macroeconomic stability and now heading towards prosperity. While counting economic progress with the nation, Dar had argued that the international financial institutions had predicted about default of Pakistan in 2014 but the incumbent regime in last one year achieved economic stability and averted threat of economic collapse. Pakistan had achieved GDP growth of 4.1 percent and brought down inflation into sin-
gle digit, which could be termed as success on the part of the government during its first year rule and overall performance on the economic front. However, the power outages and overall energy crisis persisted and the government would have to put its act together to resolve this lingering crisis. On one side, the government is moving towards importing LNG as one part of the electricity crisis is directly linked with the provision of uninterrupted gas supply to power generation companies because power generation through furnace oil resulted into piling up of circular dent because of inability of the government to recover full dues from the customers. The Finance Minister had also stated in plain words that there was no possibility of clearing the circular debt by the government. It is the issue of cash flows and the power sector should manage
this affair by ensuring recovery of its outstanding bills from both public as well as private sector at all costs. The government seems serious about reforming different economic sectors as according to the minister the country had experienced a turnaround during PML-N’s first year in power. He had also cautioned that any ‘political adventure’ would reverse the process of economic stability as international investment rating agency Moody’s had termed domestic political stability a precondition for upgrading Pakistan’s rating. In the overall political and economic context, the ruling and opposition parties should forge unity for sake of the country and should come up with national economic agenda to achieve consensus on this front that can set the stage of progress and prosperity for Pakistan over medium to long term basis.
www.customstoday.com
NATIONAL 09
AUGUST 12 - AUGUST 18, 2014
Sindh stamp duty’s collection up; target missed
KARACHI: The Sindh government collected Rs6 billion from stamp duty during the previous fiscal year against Rs4.6 billion last year.However, the collection was Rs500 million less against the set target of Rs6.5 billion for 2013-14.The data released by the Sindh Board of Revenue (SBR) shows that the highest amount of stamp duty, Rs872 million was recorded in January, followed by Rs513 million in May, Rs512m in November and Rs473m in June.
FBR exceeds revenue target by Rs1b in July he committed work of field formation officers under new acting Chairman helped the Federal Board of Revenue (FBR) in exceeding the revenue collection target in July 2014 by one billion rupees as it collected Rs 138 billion during the month of July against Rs 137 billion target. Acting Chairman of FBR Shahid Hussain Asad while talking to CustomsToday said that target for the previous month was Rs 137 billion but FBR has surpassed the target by one billion rupees by collecting Rs 138 billon in July 2014. Sources informed that revenue collection could further enhance if country did not observe long Eid holidays that stopped the economic activities. “The FBR has faced revenue loss of Rs 42 billion during six holidays of Eid-ul-Fitr”source said. He confirmed that FBR has collected about seven billion rupees every day, therefore, six holidays cost Rs 42 billion in terms of tax collection. Sources in FBR told Customs Today that this revenue shortfall during Eid holidays could hit the government’s efforts to achieve tax collection target of Rs 2.81 trillion. The FBR had set its target at Rs 2475 billion last fiscal year, which was revised twice to Rs 2345 billion and again to Rs 2275 billion. However, the FBR even after that failed to achieve revenue target by the end of June 2014 and collected Rs 2266 billion. The annual revenue collection of Rs 2.810 trillion is very critical and challenging for Federal Board of Revenue as it already missed target of last fiscal year. However, it is very encouraging and optimistic step that despite the Eid holidays in last week of July cost revenue collection Rs 42 billion, FBR managed to collect more than its target. If the lost amount was also added into total collection, it would be easier for FBR to achieve its yearly target. FBR acting Chairman has been working hard to achieve revenue target since his appointment and even in Eid holidays he gave due time to FBR. —CT Report
T
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
FBR directs Rtos, ltUs to collect data of potential taxpayers FBR to issue tax cards to 850,000 filers of tax returns which would help taxpayers to get tax favour on vehicles and property sale/purchase ISLAMABAD
CUStoMS toDAY RePoRt www.customstoday.com
T
he regional tax offices and large tax payer units on directions from Federal Board of Revenue (FBR) has covertly started to collect and computerize details about potential tax payers to increase the tax base. As per details, Federal Board of Revenue (FBR) has directed all regional offices to collect details about source of income, property and tax payments of residents in their jurisdiction. Sources told Customs Today that regional offices have received directions from FBR to computerize the details about individual's data that can pay tax. These details include names, ownership of plots, property, bank accounts, electricity and gas bills and details about dependents. “After compiling the data FBR will issue notices to individuals who were potential taxpayers and if they notice bearer challenged it on wrong grounds they will be fined equal to the payable tax. Previously, regional offices has sought help of banks, housing au-
thorities and motor registration authorities to provide details about potential taxpayers but these authorities challenged the decision in FBR headquarter. Later, on explanation the legitimacy, these institutions started providing related information which will help increase in tax net and consequently in national exchequer. Meanwhile, Federal Board of Revenue will issue tax cards to about 8, 50,000 filers of tax returns which would help taxpayers to get tax favour on vehicles and property sale/purchase. Federal Board of Revenue (FBR) acting Chairman Shahid Hussain Asad told Customs Today that issuing of tax cards would benefit tax payers and they will get favours and exemptions on their with-
FBR holding
taxes. He said that the non-filers have to pay more withholding tax on their property, vehicles and other goods in comparison to card holders. It is important to mention here that withholding tax is adjustable so card holders could be benefitted from it but non-filers will have to pay full withholding tax. The contract to issue tax card has been given to National Database and Registration Authority (Nadra) who will deliver these cards to FBR for further distribution. A source confirmed that FBR has decided to give favours and exemptions to taxpayers so their trust could be built which will further enhance the ratio to pay tax on time.
Redressing‘hold’flaw in weBoC To,
The Collector, MCC-Appraisement (West), Customs House, Karachi Respected Sir,
Through this letter, I would like to draw your attention towards a very sensitive issue pertaining to the paperless computerized system i.e. Web Based One Customs (WeBOC). Sir, the importers and customs agents are facing an issue related to WeBOC, computerized system, affecting the cost of doing business. Importers and customs agents are facing problems regarding “hold” on consignments for any reason, as the WeBOC does not has the facility to show the “hold” to importer/customs agents while Riling the Goods Declaration (GD).
This Rlaw in the WeBOC, computerized system causes demurrage charges and delay in releasing the consignments, which creates nuisance for the trade bodies. I hope you will consider the said grievance and
take effective measures for redressal of this issue. Best Regards, Khawaja Talha Tariq, Member KCAA, Karachi
www.customstoday.com
10 NATIONAL
AUGUST 12 - AUGUST 18, 2014
Schedule for advance tax collection on cars booking issued
KARACHI: The authorised car dealers have issued schedule for collection of advance income tax, declaring different amounts for both the filers and non-filers of income tax, at the time of booking of cars and jeeps. Dealers will collect the advance income tax on behalf of their assemblers as per decision taken in the federal budget 2014-2015. The assemblers will then deposit the tax to the government’s treasury. For Mehran VX and Mehran VXR, for instance, advance income tax of Rs10,000 is fixed for both filers and non-filers.
Customs seizes container involving Rs200m taxes; 5 arrested LAHORE
M Hayat
www.customstoday.com
T
he Central Directorate of Customs Intelligence and Investigation unearthed huge tax evasion of Rs 200 million and seized a container fully loaded with imported raw material and arrested Rive accused. OfRicial sources said that acting on a tipoff, DG Customs Intelligence and Investigation Lutfullah Virk, directed the Director Intelligence Imtiaz Ahmad Khan and Additional Director Rizwan Salabat that Tanvir Khan of Peshawar, registered as a manufacturer and exporter of PV coated cable was getting beneRit of zero duty under SROs 822 and 450 for importing raw material from China and selling it in the local market instead of manufacturing valueadded products for export, thereby causing loss of millions to the national kitty. A special team led by Intelligence OfRicer Mian Muhammad Yasin successfully conducted a raid at a warehouse and seized a container of imported raw material being unloaded at the site which was to be taken to Peshawar for manufacturing of export goods. The entire consignment was taken into custody besides arresting the co-accused Yamin, Rehman Ahmad Shah, driver Muzaffar Abass, cleaner Muhammad Imran and ShaRiq Khan. Preliminary
investigation revealed that Tanvir Khan has so far imported 57 such consignments and caused Rs 3.9m loss on each import. Meanwhile, Customs Intelligence and Investigation Lahore Directorate foiled bid to smuggle millions of rupees ball bearings and foreign cloth at Faizpur Interchange, arresting 5 accused. Sources said that the customs inspector intercepted a passenger bus at the Faizpur interchange loaded with ball bearings and cloth. They said that the seized cloth and ball bearings were being smuggled in Lahore markets by accused Javaid, resident of Peshawar. They said that the authorities, after registering FIR, have arrested Rive ac-
cused and started further investigation. Meanwhile, Customs anti-smuggling unit on Thursday conRiscated three vehicles worth Rs 7 million involving duty and taxes of Rs3.4 million. OfRicial sources said that the anti-smuggling seized three vehicles including Toyota Estima, Toyota Surf and Suzuki Every at various places in the city including DHA, Mozang and Ghung. They said that under the instruction of collector of customs adjudication, antismuggling wing has sped up conRiscation of the illegal vehicles in the city. Sources informed that under new amnesty scheme, these vehicles would be released to the
owners if they pay the duty and taxes. Meanwhile, Customs Investigation and Intelligence (I&I) Lahore has seized a container of non-PVC cable worth Rs 10 million from a warehouse. Sources said that the cable container was conRiscated as the owners failed to produce its documents. They said that the cable was imported by an importer for Peshawar in raw form which is 100 percent duty free but the importer instead of consuming the cable in Peshawar attempted to sale in Lahore market. The sources informed that customs intelligence on a tip raided Tanveer Private Warehouse at Momen pura and seized the smuggled non-PVC cable.
FBR withdrawal of duty on steel sheet plunges fans’price PESHAWAR
Nader khan
www.customstoday.com
T
he prices of electric homemade room coolers and fans in Peshawar dropped after Federal Board of Revenue (FBR) has withdrawn 10 percent Customs duty on the import of electrical silicon steel sheet. Afghan refugees who were residing in Khyber Pakhtunkhwa and Peshawar have also developed their local industry of electric rooms coolers which were widely popular on low rates as compare to company made room coolers. The average prices of these rooms cooler have been ranging between Rs 5000 to Rs 6000. The important part of these rooms cooler is electrical silicon steel sheet which is used inside
the motor of these fans and room coolers and these sheets were being imported from various countries. A source conRirmed Customs Today that the FBR with a view to minimizing cases of mis-declaration at the stage of import had imposed 10 percent Customs duty on Silicon and Alloy steel in the current Riscal year budget (2014-2015) and the same was notiRied under the First Schedule of the Customs Act, 1969, making it effective from July 1, 2014. According to FBR sources Electrical silicon steel sheet (cold rolled), falling under H.S Code No 7225-1900 and 7226-1900, is the major raw material for manufacturing electric fans (Rotor + Stator) and previously was being imported into Pakistan on zero rated Customs duty. However, the imposition of custom duty on electrical silicon
steel sheet directly hit the electric fan industry and it was apprehended that there would be massive decline in exports as these sheets are used for manufacturing quality fans. Later, the representatives of Pakistan Electric Fan Manufacturers Association (PEFMA) held meetings with Federal Finance Minister Muhammad Ishaq Dar and Federal Commerce Minister Khurram Dastagir and senior Customs ofRicials to get this duty withdrawn. Later, FBR has withdrawn the imposed duty and the industry mainly consumed non-grainoriented electrical steel sheet HS Code 7255.1900 for manufacturing fan. The FBR in exercise of powers conferred under Section 19 of the Customs Act, 1969 (lV of 1969) has also issued S.R.O. 565 (l) 12014, to amend the previous notiRication.
vehicle amnesty scheme: FBR yet to take action against culprits MULTAN
Imran Ali khan A dealer Ilyas Ahmad said that the export of Pakistan's electric fans was continuously increasing and domestic fan industry had earned a foreign exchange of $40.35million during FY14 as compared to $38m in FY13, thereby depicting an increase of seven percent. In terms of volume, the industry has exported some 1.8 million units of electric fan in FY14 up from 1.79 million units. He said that although fan industry has been facing a tough competition with other exporting countries such as China, India, Malaysia, Thailand, Taiwan and Vietnam, the following withdrawal of the duty on silicon steel sheet was expecting export of over two million fans during this Riscal year. He also lauded the efforts of federal Rinance and commerce ministers and the ofRicials of FBR in resolving this issue on priority.
www.customstoday.com
T
he Federal Board of Revenue (FBR) has failed to take action against the Customs ofRicials involved in clearing thousands of Vehicles through vehicle Amnesty Scheme despite of the fact that court canceled the said scheme. According to detail, FBR has yet not taken any action against customs ofRicials involved in illegal clearance of more than 52000 vehicles through vehicles Amnesty Scheme.This scheme had caused more than Rs 35 Billion losses to national exchequer during last year and FBR had announced to take action against the ofRicials who were involved. The Amnesty Scheme was declared null and void after the decision of judiciary and it was clearly mentioned in the verdict of court that scheme was launched to provide beneRit to speciRic class.
www.customstoday.com
NATIONAL 11
AUGUST 12 - AUGUST 18, 2014
Dubai to observe global trade week from oct 27-29
DUBAI: Dubai Customs has announced a partnership with Global Trade week 2014 under the patronage of Sultan bin Saeed Al Mansouri and UAE Ministry of Economy where business and government leaders from over 80 countries will gather for mutual cooperation. Global Trade Development Week is the world's largest trade facilitation, development and investment programme of events.This year's event will see the launch of a new summit especially dedicated to customs & trade facilitation issues.
Corruption charges: govt stops FPCCI funding; NAB, tDAP launch probe ISLAMABAD
CUStoMS toDAY RePoRt www.customstoday.com
T
he federal government has stopped funding of the Apex chamber, following the corruption allegations of Rs 250 million in construction of FPCCI Capital OfRice building and ordered National Accountability Bureau to investigate the matter. After getting evidence of corruption from Federation of Pakistan Chambers of Commerce and Industry (FPCCI) former vice president Mirza Abdul Rehman, the Federal Secretary Commerce has barred TDAP from releasing Rs 50 million approved for FPCCI and directed its Chief Executive S.M Muneer to launch an investigation. Mr. Muneer has formed an investigation committee but its impartiality is questionable as the incumbent president of the FPCCI Zakria Usman is a member of the said committee despite being under allegations. Mirza Abdul Rehman has also provided evidence to the National Accountability Bureau which has launched a separate investigation into the issue. The applications forwarded by the FPCCI vice president stated that Iftikhar Ali Malik, Vice President of the SAARC chamber and Co-Chairman Businessman Panel of the FPCCI has allotted contracts of consultancy and architecture to a relative Zaheer A.
IoCo issues 50 certificates to importers
T
he Input-Output Co-efRicient Organization (IOCO) has issued around 50 provisional certiRicates during a month, in which it allows the local importers to import raw material for manufacturing the products of local industries under concessionary regime with relaxation in customs duty related to the SRO 565(I)/2014.A FBR sources informed Customs Today that the list of the importers has yet to be Rinalized, as the IOCO taking the matter very seriously before issuance of provisional certiRicates and tried to issue the certiRicates to the genuine importers for production.The sources further informed that previously provisional certiRicates had been issued to those parties which did not involve in importation of any raw material and manufacturing the goods by taking beneRit of the concessionary regime which suffers colossal loss to national exchequer.
Sheikh while contract for construction the building was awarded to his another kin Akbar Sheikh. Mr. Zaheer was paid Rs 13.5 million illegally, mostly in advance, who designed a 12storey building violating CDA laws and used substandard material for construction which resulted in Rs 30 million in repairs and remoulding after construction. Surprisingly, architect, consultant and contractor were not Rined or asked for a clariRication; rather they continued to get
payments from the FPCCI. Moreover, Mirza Abdul Rehman said in his application that contract for air-conditioning was given to the highest bidder prompting legal action by another company which was ready to do the same job for Rs 3.5 million lesser price. “Despite the massive plunder no one was held responsible instead the leaders of Businessman Panel of the FPCCI awarded SAARC Chamber vice president Iftikhar Ali Malik chairmanship of the SAARC Chamber build-
ing committee”, he added. Mirza Abdul Rehman alleged that the contract, design and consultancy for the SAARC building was being awarded to the same people who were responsible for the mess in the construction of FPCCI Islamabad building. When contacted, FPCCI Capital OfRice deputy secretary said that construction was supervised by elected representatives and all the payments were done by head ofRice to which staff has nothing to do.
Hyderabad Customs reluctant to fill vacant seats HYDERABAD
ASlAM ANJUM QUReSHI www.customstoday.com
H
yderabad Customs has failed to appoint new ofRicers on many vacant seats even after passing 40 days. Also new appointed ofRicers have not yet been assigned duties and they are confused about their authority. On the other hand, taxpayers were also facing difRiculties regarding submission of their tax returns and other tax related operations because of the shortage of ofRicials. FBR has promoted Deputy Collectors to BPS-19 Additional Customs Collectors in Hyderabad Customs House but they were not yet allotted their duties. Moreover, many seats of Rield formation ofRicers are still vacant and no appointment has yet been made on these vacant seats in spite of complaints from taxpayers who were facing difRiculties. The taxpayers have demanded the FBR to appoint new Additional Collector and Deputy Collector in Hyderabad Customs House so that their grievances could be lessened.
No appointment has yet been made on vacant seats in spite of complaints from taxpayers
It is important to mention here that FBR had already faced Rs 42 billion loss because of prolonged six days Eid holidays and now because of these vacant seats this amount could further increase with each passing day. The FBR acting Chairman Shahid Hussain Asad also shown his concerns over recent prevailing situation and said that there is wide gap between policies of government and their practical implementation. He also reiterated the FBR decision to take strict actions against non taxpayers and to retrieve payable tax from them so that revenue collections could be enhanced to make country more prosperous and economically strong. Previously, FBR has announced to promote 77 inspectors to the rank of Income Tax Officers (ITOs), however, 113 seats of ITOs were also still vacant and tax department was reluctant to fill the posts. Federal Revenue Alliance Union central president Abdul Qayyum hailed the promotion’s decision of the FBR, however he asked the chairman to Rill all other vacant seats of ITOs as well.
withholding tax on 1000cc vehicles rebuffed SIALKOT
CUStoMS toDAY RePoRt www.customstoday.com
T
he business community has urged the Punjab government to abolish the Rs 30000 withholding tax levied on the transfer of the 1000 CC vehicles, saying that this withholding tax has become unbearable. They argued that earlier the ratio of this tax was Rs 4000 and now Punjab government has increased it to Rs 30000 which is unbearable. Markazi Anjuman Tajraan Sialkot President Haji Mehar Ghulam Mujtaba, Haji Ehsanul Haq Butt, DBA President Shahid Mir Advocate, Citizens’ Rights Protection Forum Chairman Dr. Muneer Butt, Markazi Anjuman Saarifeen Sialkot Chairman Khawaja Tariq Butt and Thinkers’ Forum Daska Chairman Muhammad Jameel Khanna demanded immediate abolition of this heavy and unbearable withholding tax.
www.customstoday.com
12
AUGUST 12 - AUGUST 18, 2014
Draft of revised textile bill finalised
ISLAMABAD: The Research Development and Advisory cell of textile ministry has prepared a bill envisaging wide-ranging measures to encourage value-addition in textiles and to give rights to Textile Ministry for legislation about promotion of textile exports. The bill enabled the ministry to raise standards, store and enhance exports quality of textile goods of country. Previously, RDA prepared an act for improvement in textile industry and enhancement of standard of textile goods which was bounced by ministry of law.
FBR issues Rs350m tax payment notice to Minhaj-ul Quran lHC disposes of Minhaj petition against FBR notices LAHORE
CUStoMS toDAY RePoRt www.customstoday.com
R
egional Tax OfRice (RTO-I) Lahore has issued a income tax notice to Minhaj-ul Quran with a tax payment demand of Rs 350 million. Sources conRirmed that the RTO-I Lahore has served a notice to the said organisation. The tax demand has been raised to the tune of Rs 350 million, without inclusion of additional tax and penalty. The tax proceedings have also been initiated against 10 to 15 activists of the said organisation having properties and accounts in their names. Last month, Federal Investigation Agency (FIA) asked the FBR to carry out tax evaluation of 23 key activists of Pakistan Awami Tehreek/Minhajul Quran, including its head Dr Tahir-ul Qadri. According to the FIA, ''Enquiry No, 05/2013 FIA SIU Islamabad'' is under agency’s probe. It is submitted that FIA is conducting an enquiry into the affairs of Minhaj-ul Quran and its sister organisations. The 23 activists of the said organisation are running the Rinancial affairs of the said organisations. Since these persons are actively involved in making or using the donations, which pertain to FIA/SIU enquiry 5/13; therefore, to Rinalise the inquiry on merit,
a detailed tax evaluation of the said members of these organisations may be conducted to ascertain their tax status, and the result may be intimated to the FIA Islamabad, the FIA’s letter added. FIA had also communicated 23 names and their computerised national identity card numbers (CNICs) to the FBR for the purpose of tax evaluation. Earlier, the Lahore High Court disposed of a petition Riled by Minhajul Quran challenging the audit notice by the FBR. The single bench comprising Justice Abid Aziz Sheikh
was hearing the case. The petitioner submitted to the court that Minhaj-ul Quran was a welfare organization therefore had exemption from tax. He was of the view in his petition that no tax had been imposed on Minhaj-ul Quran since 1982 but now FBR had issued audit notices to the institution on political basis. He pleaded the court to set aside the notice issued by FBR. However, FBR Inland Revenue Department's counsel contended that Minhaj-ul Quran was not a welfare organization and it was bound to pay
tax. In their statement they said that department issued notices to the petitioner-organization but Rirst they sought time and then they refused to appear on second notice. The court, disposing of the matter, directed the petitioner to challenge the decision through a new petition or avail the other available remedy. Meanwhile, FBR decided to take stern action against 16 leaders of Pakistan Awami Tehreek for not submitting tax related documents and details of foreign donations which involved tax evasion of Rs 350 mil-
lion. “We have found several million rupees bank transactions through different bank statements but the PAT chief and workers did not bother to Rile tax returns,” sources in the FBR conRirmed to Customs Today. The Lahore RTO has found that the PAT workers did not pay due tax. The Federal Board of Revenue has served notices on 16 top PAT leaders for their alleged involvement in Rs 350 million tax evasion and asked them to submit details of foreign donations and charities.