daily on www.customstoday.com
Find us on
pAKISTAN’S fIRST INdepTH NeWSpApeR ON CuSTOmS
vol 1 Issue No. 47
Karachi, Tue Jan 07 - mon Jan 13, 2014
Weekly
Regd. No, mC-1381
Price Rs. 50.00
GRANTING NdA STATuS
Rather than MFN status, the government is going to accord Non- Discriminatory Access (NDA) status to India, says Dastgir | See pAGe 04 |
No policy direction on shipping industry has yet been formulated since independence as successive governments do not interact with the stakeholders
NO ORGANIzed evASION
SOHAIL RAB KHAN www.customstoday.com
No organized duty evasion or mis-declaration was found in Lahore and its revenue registered a surge of 28 percent, says Chief Collector Virk | See pAGe 02 | WeBOC AmeNdmeNTS
The entire team is working tirelessly to complete amendments inWeBOC and install all modules of One Customs into it, says PDTanveer Ahmad | See pAGe 06 | CARTOONS SpeCIAL
| See pAGe 11 |
T
he Pakistan Ship’s Agents Association (PSAA) strongly backs enhanced bilateral trade with India as it is imperative for the economic growth of the country. ThisisstatedbytheChairmanPakistan Ships Agents Association, Mohammed A. Rajpar during an exclusive interview with CustomsToday at his office. Rajpar while sharing his views said that privatization of the institutions and its resources is vital for development and progressofthecountry.Hesaidthatthenational economy remained stable in the regime of former General (retd) Pervez Musharraf,ashisgovernmentwasfocused on development works. Replying to a question, Rajpar said that the stated policies of the PML-N government are laudable, however; timely implementation would be needed to get good results. “We have recommended to the government for introducing automation and enhancing the trade activities in order to improve the working scenario at ports”, he informed. Rajparfurtherstressed onthecapacity enhancement at ports adding that 16 metredepthatKarachiPortandPortMuhammad Bin Qasim is required, so that giganticshipscanharboratportsandtheimports of the country could be increased. Talking on labor reforms, the Chairman PSAA said that the govern-
mentshouldlookintothematterseriously. Rajpar pointed out that incompetent and unskilled workers are hired at both the ports i.e. Karachi Port and Port Muhammad Bin Qasim under Karachi Docks Labor Port (KDLP). “Thousands of workers have been recruited in KDLP on political basis for last 20 years which is an extra burden on the country’s economy, as more than half of the total employees in KDLP are withdrawing their salaries as ‘ghost employees’, he asserted. Responding to a query, the Chairman PSAA said that internal trade deficit, lawlessness, rising population and other such issues are the main hurdles in the progress of the economy, adding that the governmentshouldredressthesaidissuesinorder to improve the economy activities. Rajpar regretted that no policy directiononshippingindustryhasyetbeen formulated since independenceas successive governments do not interact with the stakeholders in this regard. Speaking on the occasion, Rajpar said that the revival of the shipping industry on war-footing basis is crucial for the sustainable economy, adding that long term policies in this regard are needed to be made for getting desirable results. Answering to a question,
the Chairman PSAA endorsed the demand made by Chairman Pakistan International Freight Forwarders Association (PIFFA) for making Karachi a transshipment hub. HeinformedthatthePSAAhasalready written a letter to the federal government in this regard and is waiting for kind reply. To a query, Rajpar clarified that the shippingcompaniesarechargingdetentionchargesuptoUS$5toUS$7 per day. Rajpar said that the PSAA is the sole trade association representing the shipping agents. It is licensed for wholePakistanbytheMinistry of Commerce, Directorate General of Trade Organisation (DGTO) under Trade Organisation Act, 2013. He further said that the PSAA comprised over 70 reputed members handling vessels at ports. The main objective of the PSAA is to resolve
the issues faced by the members and to make a positive contribution in the long term progress and growth of the ports and shipping industry.
— Exlusive Customs Today photo
KARACHI
www.customstoday.com
LAHORE
JANUARY 07 - JANUARY 13, 2014
Customs duty reduced on goods imported from SAARC members
ISLAMABAD: Government has announced tariff concessions on the import of additional 340 items, which includes crude oil from SAARC member countries under the South Asian Free Trade Area (SAFTA) from January 1, 2014. FBR has amended SRO 1274 (I)/2006 through an SRO 1073 (I)/2013 in this regard. Through SRO 1073 (I)/2013, a new table has been added to allow tariff concessions on the import of 340 items from SAARC member countries with effect from January 1, 2014.
Noorganizeddutyevasion,mis-declaration foundinLahore:ChiefCollectorVirk
— Exlusive Customs Today photos
02
LAHORE
m HAYAT
www.customstoday.com olitical will, fiscal and administrative measures and good intention of the stakeholders are needed to eradicate the menace of smuggling which is harming the legitimate businesses. It is heartening to note that no organized duty evasion or misdeclaration was found in Lahore and its revenues registered a surge of 28 percent for which the credit goes to the private sector. This was the upshot of the address of MCC Lahore Chief Collector LutfullahVirk during an interactive session with the importers and exporters at the Lahore Chamber of Commerce and Industry. He was accompanied by Collector of Customs Appraisement Zeba Hai Azhar, Collector of Customs Preventive Junaid Akram and Additional Collector Mohsin Rafique.“The central region attained 28 percent revenue growth in a critical time when other regions fell short of achieving revenue targets. It became possible only with the cooperation of Lahore, Faisalabad and Multan business community which is really a commendable thing,” the chief collector said. “Future is with us as Lahore is going to be the central place for all economic activities. As soon as across the border trade with India is kick started, Pakistan, Iran,Turkey, Europe and Central Asian states will be conducting all trade activities through the city,” he expressed. Answering various questions of importers, exporters, traders, industrialists and Customs agents, the chief collector said that the required level of cooperation by the business community can resolve several outstanding issues including valuation and smuggling. He assured to take up with the Director GeneralValuation and Member Customs, the issues pertaining to lack of infrastructure at the NLC,Thokar Niaz Baig,Wagha Border andT-10 Lahore Railway Station, adding that joint efforts of Customs Department, Customs agents and chamber can produce good results. Responding to a query about DTRE, the Chief Collector promised to issue necessary directives to the officials concerned. Customs agents, businessmen, importers and exporters also spoke on the occasion. Lahore Customs Agents
P
Collector Appraisement zeba Hai Azhar
Collector preventive Junaid Akram
Chief Collector Customs Lahore Lutfullah virk
Additional Collector mohsin Rafique Association Chairman Amjad Chaudhary complained that Customs Intelligence has been registering FIRs against importers even after the clearance of the goods. Amjad urged the Chief Collector to immediately redress the grievances of
Customs Agents Chairman Amjad Ch the agents pertaining to Customs Intelligence. An importer,Talha Habib said that the traders in Lahore were unduly disturbed saying that goods and articles are passed through various places but examined in Lahore. And
these goods should be examined at border. India-Pakistan Trade Promotion committee chairman Aftab Ahmad Vohra said that infrastructure at the T-10 Lahore Railway Station, NLC Wagha Border and Thokar Niaz Baig needs urgent attention of the authorities. Improper drainage system and broken roads are posing inconvenience while theft from the warehouses and containers has become a routine matter, he added. Iftikhar Ali Malik, a well-known businessman urged the Customs officials to remain vigilant and study all the clauses of GSP Plus status. Another exporter Afzal said that their customers abroad complained that quantity of the goods exported was falling and exported goods are being stolen. Customs Department should resolve this matter as soon as possible. Shafaqat Saeed Pracha said that in order to overcome smuggling, check posts should be installed immediately at the border areas of Attock, Sadiqabad, Gilgat. He further said that Customs raids inside the city outlets are unjustified. Khawaja khawar said that SRO
culture should be abolished and taxes reduced to cope with the menace of under-invoicing. Speaking on the occasion, LCCI President Engineer Sohail Lashari and Vice President Kashif Anwar urged the Chief Collector Customs that the up-country businessmen should be taken on board while determining the value of the goods as the higher valuation of goods and raw material is not only jacking up cost of doing business in the country but also encouraging corruption and smuggling. The LCCIVice President Kashif Anwar said that the Lahore Chamber of Commerce and Industry had received a number of complaints from its members that consignments for exports are damaged during the forwarding process and importers often complain about receiving less quantity than mentioned in the packaging list/invoice, therefore a probe should be launched to stop this wrongdoing. Muhammad Haroon Arrora, Nasir Hameed, Mohammad Akram, Chaudhry Muhammad Aslam and Mian Zahid Javaid were prominent among the speakers.
www.customstoday.com
NATIONAL 03
JANUARY 07 - JANUARY 13, 2014
Amends to customs baggage rules on the cards to honour taxpayers
ISLAMABAD: The government has decided issuance of Taxpayers Privilege Cards (TPC) to top taxpayers and granting them incentives through amendment to the customs baggage rules to enhance baggage allowance from $500 to $2,500. FBR has directed its Member Customs for amendments to the baggage rules till March 2014. The holders of the Taxpayer’s Privilege Card will be entitled to VIP Lounge at airports, fast track clearance at immigration counters, issuance of gratis passport and increase in baggage allowance from $500 to $2,500.
he Federal Board of Revenue (FBR) soothed the frayed tempers of members of Public Accounts Committee (PAC) by giving the MPs a clean chit, saying that all the parliamentarians were paying taxes. The clarification was made at a PAC meeting held with its Chairman Syed Khursheed Shah in the chair wherein FBR Chairman Tariq Bajwa showed up to clarify the FBR position on the‘leaking’of tax details of the parliamentarians. While clarifying reports pertaining to discrepancies in tax details of parliamentarians, the FBR chairman declared that the board did not put up tax details of parliamentarians as it was a secret. He claimed that in the run up to the elections, the ECP, through a letter, sought to upload tax details of parliamentarians online“but we refused,”adding that tax details of any individual could not be made public as per the law. Tariq Bajwa maintained that the ECP put these details on its website without caring for making difference between the total income and taxable income which needed to be understood. The FBR chairman pointed out the parliamentarians paid agriculture tax to the provinces and whose income was generated from business paid taxes in a different way, adding that income tax from the salaries of parliamentarians was deducted at source. After the FBR clarification, PAC Chairman Syed Khursheed Shah settled the issue. Finance Secretary Dr Waqar Masood and Dr Azra Fazal Pucheho also attended the PAC meeting. —CT Report
T
DCAs to launch protest ata Controlling Assistants (DCAs) in Computer Bureau Department, Customs House Karachi are going to launch a protest against non-compliance of their promotion orders given by FTA in the year 2013. One of the DCAs informed Customs Today that a meeting in this regard would be held next week, in which a strategy would be evolved in order to launch a protest against non-compliance of FTA orders. He further said that 26 DCAs are waiting for their due promotion for the post of MIS officials in Grade 16 for last one year, adding that despite the clear directives given by FTA in this regard, the authorities concerned have not yet implemented the orders.“DCAs have taken up the matter before the Chief Collector (Appraisement) and Collector-Appraisement (West) and both the officials have endorsed our demand in this regard”, he added. He further said that the case has been sent to FBR and the DCAs got the last reply in the month of September, 2013, but until now, no action has been taken in this regard. —CT Report
D
MCCLahorePreventiveundertakes largescalereshufflingatLFUWagha LAHORE
CuSTOmS TOdAY RepORT www.customstoday.com
M
odel Customs Collectorate (MCC) Lahore has undertaken a large scale reshufKling at the Wagha LFU (Land Freight Unit) which comes under MCC Lahore Preventive. At least 85 ofKicials including additional collectors of customs, inspectors and other ofKicials have been transferred. According to details, Dr Asif Mahmood Jah, additional collector customs, AFU has been transferred from air freight unit and posted as additional collector customs at LFU Wagha with immediate effect. Earlier additional collector customs Saadia Munib was heading LFU Wagha. Seven Deputy/Assistant Collectors of MCC (preventive) Lahore including Irum Sohail, Tariq Ahmed Dar, ShaKiqu Rehman, Babar Ali Shah, Beenish Iftikhar, Ammara Ahmad Mir and Saqibur Rehman have been reshufKled among AFU, HQ, LFU, APT, T-10, PFC and APT with immediate effect. Ten superintendents of MCC (preventive) Lahore have also been transferred and posted from LFU to AFU, T-10, AFC and other areas in Lahore. The superintendent included Dilmir Ahmed Malik, Ejaz Ahmed Shahheen, Fayyaz Ahmed, Imtiaz Hussain Khan, Mumtaz Ajmal Mian, Nasir Mehmood Tarar, Tariq Amin, Waqar yousaf, Zahid Tauqeer Azhar and Zia Ashfaq. Similarly, 17 deputy superintendents of MCC Preventive Lahore have also been transferred and posted at various places in Lahore including AFU, LFU, APT, T-10 and RSW. The deputy superintendents included Abdul Sami Butt, Amjad Khaliq, Ghulam Jaffar, Irfan Khalid, Khawaja Bilal, Khawaja Sabahat, Mehmood Saeed, Mansoor Anwar Maan, Manzoor Gill, Mazhar
— Exlusive Customs Today photos
fBR soothes irate pAC, gives mps clean chit on tax issue
Transfers and postings have been made by Collector of Customs Preventive Junaid Akram due to posting of officials for a long period at one place: sources Abbas Shah, M Asghar, Mujahid Shah, Nasir Murtza, Naveed Ahsan, Rab Nawaz Malik, Rezwan Shaheen and Syed Asad Raza. In the same way 50 Customs inspectors have also been reshufKled from the Wagha LFU to various places including PFC, LFU, RWS, APT and HQ in Lahore.
www.customstoday.com
04 NATIONAL
JANUARY 07 - JANUARY 13, 2014
Suspects of ISAf containers case granted bail
KARACHI: Six persons arrested on Dec 7 for allegedly stealing ISAF containers at a private yard at Port Qasim, have got bail from Customs Courts and Sindh High Court. One of the senior officials of Pakistan Customs informed Customs Today that the challan against the owner of the private company has been presented before the court and further investigation is underway in this regard. The owner of the private company has already been granted bail. Six other accused who were freed include Rizwan Yousaf, Rizwan Ishaq, M Rafiq, Shahzad, Idrees Khan and Qaiser Ali.
Govt to accord non-discriminatory access status to India: Dastgir
Customs official kidnapped during shootout freed
C
Significantdecreasein smugglingactivities: ACWasifmalik here is a significant decrease in the smuggling activities carried out from other parts of the country to Karachi by using land routes in the month of December. This was stated by MuhammadWasif Malik, Assistant Collector Model Customs Collectorate (MCC) Preventive while talking to CustomsToday at his office. He said that the strict security and vigilance by the Preventive staff of Pakistan Customs has been observed at the entry and exit points of the city.“Check posts at entry and exit points are functional and that is why there is a major decline in smuggling activities”, he added. Malik further informed that despite there were 62 entry and exit points and linked roads into the city which make it difficult to keep continuous vigilance, MCC Preventive with its limited resources is trying its best to safeguard the land routes in order to eliminate smuggling activities. Replying to a question, Assistant Collector said that the proposal of installation of scanners on reverse cargo route was in pipe line and FBR will soon materialize the scheme. —CT Report
T
www.customstoday.com
T
he Minister of State for Commerce and Textile Khurram Dastgir said that rather than MFN status, the government is going to accord NonDiscriminatory Access (NDA) status to India. Talking to media persons in the Parliament House, Khurram Dastgir said that India has already given MFN status to Pakistan, however it has not given access to its market. While India has access to 82 percent market of Pakistan but we have not given status of MFN to India. He said any Kinal decision in this regard would be taken after consultation with all stakeholders. Dastgir informed that the government would make efforts to provide level playing Kield to its investors in Indian markets. The minister said the government is working to containerize the Wagha border to save the time and remove the security issues at the border. Facilitations would be provided at Wagha border to boost the bilateral trade through it. Khurram Dastgir further appraised that the government is tak-
— Exlusive Customs Today photo
ustoms officer kidnapped during the shootout in Rawalpindi has been released. Collector Customs Imtiaz Ahmed has said,“The kidnappers had no other option but to release the officer as raids had been started to arrest them.” Deputy Superintendent Customs Chaudhry Iftikharul Haq along with his two subordinates was shifting a container of smuggled goods after its seizure on the motorway to a warehouse in Islamabad.The suspected smugglers started shooting at them. During the shootout the three of them were kidnapped. Shortly his subordinates were freed. However, he could not be rescued.“First, the kidnappers threatened to kill the customs officer if their goods were not released but later they demanded that half of their goods should be released,” said Mohammad Asif Hargan, the deputy collector customs. Meanwhile, the police have started an investigation into the kidnapping case.The accused belonged to Khyber Pakhtunkhwa. —CT Report
CuSTOmS TOdAY RepORT
ing measures for effective implementation of all three trade agreements with India done in the previous tenure. He further noted that Pakistan would participate in SAARC business enclave in India.
India has already given MFN status to Pakistan, however it has not given access to its market, says Khurram dastgir
FTO rejects FBR re-review application ISLAMABAD
CuSTOmS TOdAY RepORT www.customstoday.com
F
ederal Tax Ombudsman has rejected the re-review application Kiled by Federal Board of Revenue wherein it was implored that FTO was not justiKied in questioning the exercise of powers given by the statute and holding FBR responsible for the issuance of the SRO 1003(I)/2011. Sources said that FBR’s re-review petition against the order passed by FTO in review 12/2012 titled as Secretary Revenue Division, Islamabad Versus Waheed Shahzad Butt, Advocate High Court, Lahore has been rejected with the remarks that there is no provision for the second review in FTO Ordinance 2000. FBR had earlier Kiled the Kirst review before the former FTO Dr Suddle which was rejected whereas now the second review was being Kiled before the present FTO Abdur Rauf Chaudhry. Sources added that earlier complainant Waheed Butt, through C No 577/2011, approached FTO and alleged that the act of issuance of Circular 06 of 2009 constituted 'maladministration' on part of some functionaries of FBR. The said circular was issued wrongly and with improper motives that resulted into loss of billions of rupees to the national exchequer. In RA 12/2012 former FTO Dr Shoaib Suddle had ruled
— Exlusive Customs Today photo
— Exlusive Customs Today photo
ISLAMABAD
FBR acted beyond its jurisdiction in exempting corporate sector service providers from minimum tax, observes fTO
that FBR act of issuing Circular 06 of 2009 and then inserting Clause 79 in the Second Schedule of the Income Tax Ordinance 2001 through SRO 1003(I)/2011 without approval of the Parliament speaks of improper motive, as also inefficiency, incompetence and ineptitude. FTO recommended to take action against tax ofKicials responsible for amending the taxation regime without prior approval of the Parliament, which caused a huge revenue loss to the national exchequer, remained unimplemented by FBR even after the rejection of main review petition and re-review application Kiled by the former Member Appellate Tribunal Inland Revenue. In particular, FTO had instructed FBR to take immediate measures either to delete the Clause 79 from the Second Schedule of the Ordinance or to get it approved retrospectively by the Parliament. FTO observed that FBR acted beyond its jurisdiction in exempting corporate sector service providers from minimum tax, sources added. FBR's act of inserting the said Clause in the Second Schedule without the Parliament's approval raises questions about its motives as well as its efKiciency. Also as no amendment to Section 153 was approved by Parliament the insertion of Clause 79 in the Second Schedule changing the taxation regime was clearly an act without jurisdiction.
6 valuation rulings issued in dec irectorate General of Customs Valuation Department has issued three moreValuation Rulings No. 620, 621 and 622 under Section 25-A of the Customs Act, 1969. The Valuation Ruling No.620/2013 has determined the values of Solar panels. The Customs value of the Solar panels from China has been fixed at $0.70 per Watt under PCT heading 8541.4000 and proposed PCT for WeBOC 8541.4000.1000. VR No. 621/2013 has determined the values of CCTV cameras. The Customs value of CCTV cameras without accessories/ attachments (unknown brands) from China/ Hong Kong has been fixed at $6 and $10 per piece having PCT heading 8525.8010 and proposed PCT for WeBOC 8525.8010.1000 and 8525.8010.1100. VR No.622/2013 has determined the value of iron and stainless steel wire net/mesh. Meanwhile, the Directorate of Customs Valuation Department has issued three more valuation rulings. The Customs values of Art card coated paper and light weight coated paper, milk preparations for infant use and confectionery items have been determined under VR numbers 623/2013, 624/2013 and 625/2013 respectively. —CT Report
D
www.customstoday.com
NATIONAL
JANUARY 07 - JANUARY 13, 2014
05
Land for transshipment hub: pIffA, Bahria varsity sign mou
KARACHI: PIFFA and Bahria University signed MoU for allotting a piece of land to construct transshipment hub in Karachi. Chairman PIFFA, Abdul Majeed Paracha while talking to Customs Today confirmed that a 20-acre piece of land near Northern Bypass would be allotted to PIFFA for establishing transshipment hub. Paracha said a meeting with the Chairman KPT and other authorities was also held in this regard.
pm directs fBR high-ups to reform taxation system
rime Minister Nawaz Sharif has said that FBR should reform the taxation system to facilitate the taxpayers. He also directed FBR officials to decrease the rates of Income tax, Sales tax and other duties. The Prime Minister said this while chairing a meeting on reforms in FBR and measures to provide relief to the taxpayer at the PM House.The PM directed that a comprehensive reform package should be introduced in FBR which should simplify the procedures and enhance the tax returns. He directed to bring in a tax regime which helps the businesses grow. In order to simplify the procedures and provide swift services to the taxpayer, PM directed to introduce new technology and tracking system to minimize the discretion of the tax officer. He stressed that the tax officers should facilitate people so that they feel comfortable. PM directed FBR to come up with reform package in one month. He directed that the income tax, GST and Customs slabs should be rationalized and simplified so that it leads to increase in revenue. PM observed that corruption is the root cause of all our problems and it has eaten up our economy. He directed FBR management to observe zero tolerance toward the corruption. —CT Report
Dar,Bajwareviewimpactofconcessionary regimegrantedthroughSROs
P
ISLAMABAD
CuSTOmS TOdAY RepORT www.customstoday.com
T
he actual cost of exemptions is much higher as compared to the tax expenditures. The huge cost of exemptions can only be reduced by withdrawing sales tax and customs duty exemptions. Sources said that this was the focal point of a meeting chaired by Finance Minister Ishaq Dar at the FBR House to review concessionary regime granted through SROs, notifications and fiscal laws of direct and indirect taxes. The meeting was attended by FBR Chairman Tariq Bajwa, Secretary Finance, Secretary Commerce and senior officials of National Tariff Commission (NTC) and
The government is required under the Imf programme to announce a detailed threeyear roadmap for withdrawal of discretionary SROs in the taxation system
ministries. Officials reviewed the impact of concessionary SROs and gave their input on the concessionary regime. Sources said that estimates for cost of exemptions for sales tax are around Rs 242 billion; for customs duty around Rs 161 billion; and for income tax are over Rs 31 billion. Similarly, exemptions and concessions of the excise duty for specific sector is also causing revenue loss. Under the three-year plan to phase out exemptions, some exemptions may be withdrawn from January 2014. Certain exemptions would be taken away in next federal budget. The remaining exemptions would be taken away in subsequent two fiscal years. The plan containing a list of tax exemptions to be withdrawn from April 1, 2014 onward to raise more
revenue was presented to the Prime Minister on December 30 for approval. The plan for fiscal adjustments and a roadmap for withdrawal of tax exemptions starting in April 2014 is expected to be announced by the government this week. A senior official has said that the government is required under the IMF programme to announce a detailed three-year roadmap for withdrawal of discretionary SROs in the taxation system. “Except for tax exemption on the income of the State Bank of Pakistan, unpacked essential kitchen items, life saving drugs, import of crude oil and major products like furnace oil, everything under the sun would come under tax net at the conclusion of financial year 2015-16 on June 30, 2016,” he said. Under the entire programme period, the SRO’s worth Rs 400 billion will be withdrawn in three years, he added. Total impact is estimated at about Rs 125 billion or 0.5 per cent of GDP for current fiscal year. Under a commitment given to the IMF, the authorities envisage measures yielding about 0.75 per cent of GDP in each of the subsequent years over the next two years. “The focus will be on eliminating exemptions and concessions embedded in the SROs and in the law, as well as on eliminating the power of the executive to grant preferential tax treatment through SROs. These steps will facilitate gradually moving the GST to a fullfledged integrated VAT-style modern indirect tax system with few exemptions and to an integrated income tax by 2016-17,” according to the statement.
fBR collects Rs1,020b in 6 months; shortfall remains Rs80b ISLAMABAD
CuSTOmS TOdAY RepORT www.customstoday.com
ederal Board of Revenue has recorded a huge revenue shortfall of Rs80-85 billion in the first two quarters of the current fiscal year 2013-14. FBR has collected Rs1,020 billion against the set target of Rs1,100 billion. FBR Official Spokesman Shahid Hussain Asad said that the tax collection recorded a growth of 17 percent over the same period of the last fiscal year by collecting Rs1,020 billion. “We expect that the revenue collection will go up by more than Rs10 billion in days ahead as online system of some banks was down during last 2-3 days,” he added. He ruled out any possibility of granting further extension in deadline of filing returns by the corporate sector and said that FBR directed the field commissioners to tackle individual cases and facilitate the taxpayers.
F
He said the FBR received around 11,000 corporate sector returns so far but the final figure on this front would be unveiled in next few days. According to provisional revenue collection figures compiled by FBR, the Board collected Rs1.02 trillion taxes from July to December period of this financial year as against the target of Rs1.10 trillion. FBR paid Rs35 billion in refunds to the taxpayers in the first half of the fiscal year, according to the FBR officials. FBR collected Rs375 billion in income tax in the first half of the fiscal year, which was only 37% of the total collection, underscoring increasing dependency on indirect taxation, which is regressive in nature. The sales tax collection in the first half stood at Rs462 billion as against the IMF’s expectation of Rs431 billion. An increase of 1% in the rate of general sales tax remained the main reason behind increase in collection but yet it was lower than the target as the government had increased its rate from 16 to 17 percent in the budget. The collection on account of customs duties stood at Rs112 billion.
— Exlusive Customs Today photos
06
SPECIALREPORT
www.customstoday.com JANUARY 07 - JANUARY 13, 2014
www.customstoday.com
SPECIALREPORT 07
JANUARY 07 - JANUARY 13, 2014
Director Directorate of Reforms and Automation Farrukh Sajjad
Additional Director Directorate of Reforms and Automation Irfan Javed
elaborating the features of WeBOC, Ahmad said that it is a paperless system of pakistan Customs which provides real time integration of clearing agents, traders, brokers, terminal operators, cargo handlers and Customs officials for the clearance of trade consignments.
KARACHI
SOHAIL RAB KHAN www.customstoday.com
T
he entire team of Web Based One Customs (WeBOC) is working tirelessly in order to complete amendments to WeBOC, computerised system and install all modules of One Customs into WeBOC for facilitating all the stakeholders including importers and exporters. This was stated by Project Director (PD) Directorate of Reforms and Automation, Syed Tanveer Ahmad in an exclusive interview with Customs Today at his ofKice. The PD Directorate of Reforms and Automation said that the team of WeBOC has completed 80 per cent work in order to bring amendments in the system. Ahmad conKirmed that the entire WeBOC system would work smoothly and transition would be made within six months. Replying to a question, Project Director Tanveer Ahmad said that all stakeholders including Customs agents have been taken into conKidence before making amendments in WeBOC. To a query, Project Director Reforms and Automation assured that none of the WeBOC-related issues in WeBOC left unattended as the ofKicials had been working with great determination on each and every module of the computerised system. Elaborating the features of WeBOC, Ahmad said that it is a paperless system of Pakistan Customs which provides real time integration of clearing agents, traders, brokers, terminal op-
erators, cargo handlers and Customs ofKicials for the clearance of trade consignments. “The Directorate of Reforms and Automation is focused on single window operating system through WeBOC, where the efKiciency of Pakistan Customs could be increased while minimizing the dwell time”, he added. The Project Director of Directorate of Reforms and Automation made it clear that the Pakistan Customs wants to simplify the procedures for traders and other stakeholders and ensure transparency and integrity in the system. Responding to a query, Ahmad informed that the importers can get pre-vessel information through WeBOC and also Kile their online manifest and online Goods Declarations (GDs). “The facilities of Personal Deposit (PD) Account, automated duty management, examination and assessment and Electronic Data Interchange (EDI) would also be available in WeBOC”, he added. Replying to a question, Ahmad said that the WeBOC team has completed induction of ATT modules in WeBOC and an ID would be given to those Customs agents who were working with Afghan Transit cargo. He further informed that the ATT routes and check posts have also been inducted in WeBOC in order fulKill the directives of FBR chief Tariq Bajwa. Tanveer Ahmad further informed that the team of Directorate of Reforms and Automation has already transferred the modules including exports, gems, jewellery, baggage and auction from One Customs to WeBOC for the facilitation of the trade bodies. Replying to a question, the Project Director said that the issues of the representatives of trade bodies in-
cluding importers, customs agents and others would be redressed soon. “We have held several meetings with the high ofKicials of all three collectorates i.e. MCC-Appraisement (West), MCC-Appraisement (East) and MCC-Port Muhammad Bin Qasim in order to apprise them about the amendments being made in WeBOC and also take recommendations from them”, he added. To a query, Ahmad further said that the Directorate of Reforms and Automation would take all viable recommendations of all stakeholders including Customs Agents Association seriously. “We have identiKied those modules which were not installed in One Customs as per SRO 492 and Section 22 of the Customs Act, 1969”, he added. He further informed that the Directorate of Reforms and Automations has also elaborated bulk cargo issue, DTRC, warehousing and export oriented modules in WeBOC. He further said that the Directorate of Reforms and Automations has pointed out 157 issues related to WeBOC and classiKied into four categories including glitches, proposals to strengthen the control, facilitative measures and proposals which cannot be implemented in overall WeBOC scheme. Replying to a question, the PD asserted that most of the issues have been resolved and the top most priority of the Directorate is to settle the issues being faced by exporters, importers, Customs agents and other stakeholders. Ahmad further informed that the Directorate of Reforms and Automation has also held several training seminars for the awareness of the stakeholders.
Deputy Director Directorate of Reforms and Automation Ali Zeb
THe fACILITIeS Of peRSONAL depOSIT (pd) ACCOuNT, AuTOmATed duTY mANAGemeNT, exAmINATION ANd ASSeSSmeNT ANd eLeCTRONIC dATA INTeRCHANGe (edI) WOuLd ALSO Be AvAILABLe IN WeBOC.
www.customstoday.com
08 EDITORIAL
JANUARY 07 - JANUARY 13, 2014
Founder & Chairman zulfiqar Ali Executive Editor Rahil Yasin editor@customstoday.com.pk For advertising & subscription marketing@customstoday.com.pk +92-322-3370002 www.customstoday.com Phones: 042-35781643-4, Fax: 042-35781645 Address: 627, Siddiq Trade Centre, Gulberg, Lahore
edITORIAL
Abolishing SROs
L
ast week, the Finance Minister Mohammad Ishaq Dar presented a detailed briefing to the cabinet in the presence of selected media persons in which he disclosed that the number of returns filed by taxpayers increased by 10 percent during the current fiscal year as it stood at 814,981 in 2013 compared to 744,866 in the same period of last year 2012. During the four-hour long meeting the Finance Minister was briefed on a plan being prepared by FBR for withdrawal of SROs. During the meeting a threadbare discussion was held on the existing SROs issued for concessions in IncomeTax, Customs and SalesTax. The government has prepared an ambitious plan to phase out tax exemptions of various sectors of the national economy in order to remove distortions in the existing taxation system of the country. But the effective implementation on wish-list requires political will on the part of the incumbent regime as the government will have to demonstrate a lot of courage to move ahead on this subject. It’s easy to make a plan but it will be quite difficult to execute it at this critical juncture of the country’s economy. The government requires revenues to run the affairs of the state but the taxation policy should be based on the principle of justice and equity. In Pakistan, the documented sectors are overburdened so the government should make such a policy that should aim at brining undocumented sectors to contribute their share for the wellbeing of the country. Under the IMF’s bailout package of $6.64 billion, the incumbent regime has committed to withdraw exemptions in different phases. It is also under consideration to table legislative bill before the Parliament on the eve of the upcoming budget 2014-15 for withdrawal of powers from the FBR for issuing Statutory Regulatory Orders (SROs) and these powers would be given back to the elected Parliament. From the next budget starting from July 1, 2014, the FBR will abolish first phase of exemptions. It will be real test of the FBR to show its muscles to those who enjoyed powerful connections for obtaining concessions and it was yet to see that how the PML (N) led regime resisted these powerful groups in an effective manner. With the existing declining trends on account of tax-to-GDP ratio that already touched its lowest ebb of around 8.5 percent of GDP, the country cannot achieve a quantum jump without placing out of box solutions and first step will be required to bring influential into tax net. The narrowed tax base can be gauged from this fact that out of 180 million population the number of return filers are showing dismal performance. There is no justification to burden those who are already contributing by paying their due taxes so the government should adopt a policy through which new taxpayers could be identified. The narrowed tax base cannot be overcome without abolishing trends of exemptions and concessions which only provided on the basis of connections.The FBR will have to overcome such practices for the sake of national interest.
Notaxationbutrepresentation ISLAMABAD
Sm HAIdeR
www.customstoday.com
T
he concept of “No Taxation Without Representation” does not apply in Pakistan as the elected parliamentarians consider themselves above the law. The taxes cannot be imposed without approval of the parliament but they themselves do not pay their taxes. It can be termed as severe joke with people of Pakistan. Not alone, these parliamentarians were never bothered to cover up their lies in connivance with concerned authorities but they made all-out efforts to convince masses at large that they were paying their taxes on their salaries drawn up as Parliamentarians. As tax authorities are at their mercy so they ordered the Chairman FBR and its whole team to come up before Public Accounts Committee to give a clean chit. During the proceedings of the meeting, it was ordered by the parliamentarians to FBR for issuing clariKication. According to FBR statement, in connection with tax payment by the par-
liamentarians, the issue was discussed in the PAC meeting which was attended by the Secretary Finance and Chairman FBR along with his team. The PAC members expressed annoyance on the reports appearing in the press that they are not paying tax on their income. They stated that income tax is deducted on salary income of all the parliamentarians and they also pay tax on their agricultural income to the provincial governments. They desired that FBR should clarify this factual position. It is clariKied that income tax is deducted on the salary income of all the parliamentarians under section 149 of the Income Tax Ordinance, 2001. As far as agricultural income of the parliamentarians from the yield of agricultural land is concerned, under the constitution, Federal Government cannot tax agricultural income. However, the same is taxable under the provincial Agricultural Income Tax law. But the FBR has remained unable to explain that why many parliamentarians are without National Tax Number (NTN)? Why many have failed to Kile their income tax returns?
fBR is burdening those who are already paying their taxes as the tax policy mainly relies upon increasing rates instead of broadening of tax base.
Can anyone believe that salary drawn by them as parliamentarians is their sole source of income? If it’s true then all such members deserve support from BISP. The matter of fact is that tax evasion is rampant in the country from top to bottom and the FBR is burdening those who are already paying their taxes as the tax policy mainly relies upon increasing rates instead of broadening of tax base. One thing is encouraging that payment of taxes at top has become an issue in the country and Election Commission of Pakistan (ECP) made it public the information Kiled by candidates for contesting last elections. Now things cannot be reserved so instead of Kinding out lame excuses the Parliamentarians should rectify their position and start new beginning by paying their tax obligation fully and in transparent manner which will give them justiKication to impose taxes on masses otherwise it will be futile exercise to expect from general public that they will come forward to discharge their national duty by paying taxes.
www.customstoday.com
PICTORIAL
JANUARY 07 - JANUARY 13, 2014
president for reaping great benefits of GSp plus status
LAHORE: President Mamnoon Hussain underlined the need for diversification of products and value addition, especially in textile industry to reap maximum benefits of the GSP Plus status. The President made the remarks during a presentation given by the Commerce Ministry on EU's Generalized System of Preferences Plus (GSP Plus) Scheme. Minister of State for Commerce and Textile Industry Eng Khurram Dastgir Khan, Federal Commerce Secretary Qasim M Niaz, Textile Industry Secretary Mrs Rukhsana Shah and Nadeem Hassan Asif were also present on the occasion.
Rs108,517m collected in 2nd quarter of fY2013-14
MCCPortQasimmissesrevenuetargetforsecondtime KARACHI
CuSTOmS TOdAY RepORT www.customstoday.com
he Model Customs Collectorate (MCC) Bin Qasim Port failed, for the second consecutive quarter, to achieve the targeted revenue as it collected a total of Rs108,517 million altogether in the heads of Customs Duty, SalesTax, IncomeTax and Federal Excise Duty in the second quarters of the current fiscal year 2013-14, ended on December 31. The MCC Bin Qasim Port collected Rs9,715 million in the head of Customs Duty, Rs31,356 million in SalesTax, Rs6352 million in IncomeTax and Rs1,007million in the head of federal Excise Duty (FED). Sources in the MCC Bin Qasim Port, privy to Customs Today, that the Collectorate, despite strenuous efforts, had fallen short for the second quarter to meet the FBR target. The sources claimed that the MCC Bin Qasim Port fell short to achieve the target in the head of customs duty as it collected Rs9,715 million, against the target of 15,571 million in the corresponding period, facing a shortfall of Rs5,856 million. Similarly, the Collectorate has a shortfall of Rs7,602 million in the head of Sales tax collection against the target of Rs38,958 million.“The MCC Bin Qasim Port has also failed to achieve the target set for the collection of Income tax and FED during the 2nd quarters of the fiscal year 2013-14”, they pointed out.They informed that the Collectorate had collected Rs6,352 million instead of Rs7,169m in share of Income tax while Rs1,007million in the head of FED instead of Rs1,185m in target set by FBR. The MCC Bin Qasim Port had also failed to achieve the revenue targets in the first quarters of the current fiscal. “The Collectorate collected Rs11,086million in the head of customs duty against the targeted amount of Rs17,218 million, Rs41,197million in share of Sales tax against the target of Rs51,198 million in first quarters”, they detailed. Similarly, the Collectorate collected Rs6,352 million instead of Rs7,169 million in the head of Income tax and Rs462 million in share of FED against the set target of Rs570 million during the first quarters of the current fiscal year,” they concluded.
T
mCC Gwadar shows exceptional growth in tax collection odel Customs Collectorate (MCC) Gwadar has made tax collection of Rs 8.4 billion during first half of the current fiscal year against assigned target of Rs 3.5 billion, showing a growth of 236.47 percent. Sources said that Federal Board of Revenue has received the performance report of the MCC Gwadar for the first half of the ongoing fiscal year, showing a remarkable growth due to intensified anti-smuggling efforts near Pak-Iran border, interception of Afghan Transit Trade smuggled goods and constant interception of smuggled vehicles carrying smuggled
M
POL products and other items. MCC Gwadar has been able to successfully control smuggling along the coastal areas of Balochistan. The interesting aspect of the data is that growth in collection has been witnessed despite law and order situation in Balochistan and constant security threats to Customs functionaries operating in the said area. Taxation authorities have taken notice of this exceptional growth of MCC Gwadar under current import trends where other MCCs are trying to achieve the targets. Break-up of tax collection revealed that the customs
duty collection stood at Rs 138 million against Rs 177 million, reflecting achievement of 80 percent of the target. Sales tax collection amounted to Rs 6395.02 million against 2780.26 million, showing increase of 230 percent. The collection of withholding tax totalled at Rs 1951.58 million against Rs 629.49 million. The collection of the federal excise duty (FED) was Rs 1.27 million against Rs 1.82 million. As against the corresponding period of last fiscal year (2012-13), MCC Gwadar achieved 164.20 percent growth by collecting Rs 8486.58 against last year's collection of Rs 3212.13 million, according to data. —CT Report
ISLAmABAd: Federal Minister for Finance, Senator Ishaq Dar chairing a meeting at FBR House. FBR Chairman and Members of FBR attended the meeting.
KARACHI: A group photo of Governor of Punjab, Chaudhry Mohammed Sarwar, former President FPCCI S.M. Muneer. S.M. Naseer, Mian Zahid Hussain, S.M. Tanveer, S.M. Javed, Dr. Mirza Ikhtiar Baig, Farukh Mazhar, Zubair Chhaya, Mazhar A. Nasir, Mehtab Uddin Chawla and others.
ISLAmABAd: Minister of State for Commerce & Textile Industry, Engr. Khurram Dastgir Khan in a meeting with Pakistan Tobacco Board (PTB).
09
www.customstoday.com
10 NATIONAL
JANUARY 07 - JANUARY 13, 2014
export consignments held with fake exemption documents
KARACHI: Pakistan Customs has seized consignments of export goods with fake exemption documents at a green channel facility. Model Customs Collectorate of Exports received information regarding unscrupulous elements trying to export goods against fake export documents. The Export Intelligence Branch intercepted five containers being shipped by Creative Leather Industry Karachi to UAE. The documents of consignments were found false on verification from the concerned bank.
Customs seizes smuggled goods worth Rs15.7b in three years
Importofedibleoils:Customs blowsthelidoffhugetaxevasion KARACHI
CuSTOmS TOdAY RepORT
ustoms authorities, as part of their anti-smuggling drive, have seized goods worth Rs15.736 billion in the last three fiscal years. During fiscal year 2010-11, the authorities seized goods worth Rs5.502 billion, in 2011-12 they confiscated goods worth Rs4.905 billion and in 2012-13 goods valuing Rs5.329 billion were taken into custody. According to officials, the main source of smuggling goods into Pakistan is the long porous border with Afghanistan. However, there is no mechanism to gauge the real quantum of smuggling. In its absence, the loss to the national economy cannot be determined with certainty. In an effort to curb the smuggling, the customs department has reinvigorated its enforcement measures which include intelligence sharing, launching joint operations and support and facilitation from law enforcement agencies (LEAs) to the customs authorities. Highlighting the significance of these steps, the officials said the Frontier Constabulary Balochistan and Khyber-Pakhtunkhwa had been entrusted with the task to take anti-smuggling measures within 20 km of the international border. Joint efforts are also being undertaken by the customs department and other law enforcement agencies. Additional steps taken by the authorities include constant vigilance at major entry points or smuggling routes by the customs department with the assistance of LEAs. Anti-smuggling powers are being given to the Pakistan Coastguards and the Pakistan Maritime Security Agency to curb illegal flow of goods in the coastal areas and high seas. Scanners have also been installed at airports for scanning of the baggage of incoming passengers.
C
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: letters@customstoday.com.pk
Customs department, after a thorough probe, found that almost Rs90 million were being evaded by about 73 companies in the import of edible oils
www.customstoday.com
P
akistan Customs has blew the lid off a tax evasion scam in the import of edible oils, causing a huge loss of almost Rs90 million to the national exchequer, it has been learnt reliably. The authorities claimed to have unearthed some cases whereby the national kitty has been deprived of huge tax money on the import of edible oils. Sources in Pakistan Customs revealed that the authorities had detected cases including leading cooking oil and ghee manufactures, had not been paying federal excise duty (FED), sales tax and withholding income tax by taking the advantage of similar HS code in Pakistan Customs Tariff (PCT). They pointed out that Customs Department, after a thorough probe, concluded that almost Rs90 million were being evaded by about 73 companies in the import of edible oils. Through sleight of hand these companies exploited PCT code to evade the tax, they elaborated on, adding that there were two types of edible oils being imported for cooking oil and soap, chemicals and both the products had the same PCT code but with FED exemptions on the import of non-food grade oil and sales tax exemp-
tion on food grade oil. The disclosure prompted the Customs R&D Section scrutiny of imports of the past five years including the data of WeBOC and defunct PaCCS. The sources said that the scrutiny helped detected that 73 companies including leading multinational companies had been involved in the tax
evasion. The authorities have issued notices to the companies in this regard besides the recovery of Rs19 million from eight companies involved in marketing and manufacturing of food products. Meanwhile, Pakistan Customs is also calculating default surcharges, fines and penalties on the evaded amount.
Rs18,773,388m fed on edible oils recovered
T
he Research and Development (R&D) Section of Model Customs Collectorate MCC-Appraisement (East) has collected an amount of Rs18,773,388 million in head of Federal Excise Duty (FED) on import of edible oils, PCT 15.13 at 16 percent ad valorem tax, by the end of December, 2013. According to details, acting on a tip-off that some unscrupulous elements had evaded FED on edible oil, R&D Section Principal Appraiser (PA) Shafiullah Khan thoroughly scanned through the data of WeBOC clearance as well as defunct Microclear based PaCCS and found that a handsome amount of Rs86,826,075 million from 29 Goods Declaration of different importers had not yet been paid as FED on edible oils. Subsequently, a prompt action was taken by the R&D Section of MCC-Appraisement (East) to recover the evaded FED on edible oil by the importers. The sources informed the Customs Today that the R&D Section had recovered an amount of Rs18,773,388million out of the total amount of Rs86, 826,075 evaded in the head of FED on import of edible oils. They said that the R&D Section had recovered Rs18,773,388 million from eight importers out of 29, while an amount of Rs68, 052,687 was yet to be recovered from the rest of 21 importers. Sharing details, the sources further informed that an amount of Rs95,205,892 million in the head of FED and Rs3,114,648 million was yet to be recovered by the MCC Appraisement (East) R&D Section. —CT Report
Transporters grievances not yet redressed To, The Commissioner, Shoaib Ahmed Siddiqui, Karachi Respected Sir,
I would like to inform you that grievances of transporters have not yet been redressed by the authorities concerned despite your assurance to the transporters’ bodies regarding solving of their problems as soon as possible. Through this letter, I would like to draw your kind attention towards the burning issues faced by the transporters due to which they had called a prolonged strike in November, which was later called off with the intervention of Federal Minister for Finance Mohammad Ishaq Dar.
Although, the Federal Minister for Finance assured the redressal of the transporters’ issues during the meeting with the heads of different transporters’ bodies at the Governor House, but the issues pertaining to the closure of Mai Kolachi Road for heavy vehicles and confiscating the containers and vehicles of transporters by police on big occasions still exist. The representatives of transporters’ bodies want to hold an emergent meeting with you in order to present their grievances. Thanking you,
Yours Sincerely, Haji Anwar Khan Niazi, Chairman Transporters of Goods Association
www.customstoday.com JANUARY 07 - JANUARY 13, 2014
SROs for essential commodities, pharmaceuticals to be retained
ISLAMABAD: As per requirements under the IMF’s Extended Fund Facility, the government will withdraw all the concessionary SROs in the next two-three fiscal years that provide exemptions to various sectors except those pertaining to essential commodities including pharmaceuticals. The concessionary or exemption SROs pertaining to sales tax and customs duty would be rescinded under the plan. If SRO contains essential commodities and items, location of commodities would be changed from sales tax SRO to Sixth Schedule of the Sales Tax Act, 1990.
CARTOONSSPECIAL
11
12
www.customstoday.com
JANUARY 07 - JANUARY 13, 2014
Published by M. F. Riaz, Off. 91, 3rd Flr, Gul Plaza, M.A. Rd., Karachi, for Customs Today and Printed at Dhoom Printing Press Masheer Mahal Building, Off: I. I. Chundrigar Road, Karachi