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pAKIStAN’S fIRSt INDEptH NEwSpApER ON CuStOMS
vol 3 Issue No. 1
Karachi, tue Dec 23 - Mon Dec 29, 2014
weekly
Regd. No, MC-1381
Price Rs. 50.00
ENABLINg gOvt
Appraisement-East to form
post-releaseverificationcell Increased amount of FDI enabled government to pay $1009.6 million to foreign countries during FY 2013-14. | SEE pAgE 04 | EDuCAtINg pEOpLE
FBR to launch campaign to educate people about benefits of paying taxes. | SEE pAgE 02 | ‘IgNORINg’DIRECtIONS
Officials have reluctantly executed Collector Saleem’s directions regarding renovation . | SEE pAgE 09 | AffECtINg tRADE
Energy crisis, smuggling and political impasse are badly affecting Pakistan’s trade. | SEE pAgE 06 |
Collectorate launches drive to recover stuck-up revenue by issuing notices to importers to clear consignments KARACHI
SOHAIL RAB KHAN & SYED ASLAM www.customstoday.com
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he Model Customs Collectorate (MCC) of Appraisement-East has decided to form post-release veriKication cell for initiating audit of the leaking amount in clearance of the import consignments during the period between July and December-2014, it is learnt here. Sources informed Customs Today that the authorities concerned of MCC-Appraisement (East) has assigned the task to Additional Collector Zeba Bashir to look after the matters of the cell and assist the high-ups in order to carry out the audit process of the collectorate. They said Zeba Bashir would also evaluate the performance of deputy collectors, assistance collectors and other staff of PRV Cell in connection with carried out audit process of the Collectorate. The sources further informed this scribe that
the authorities concerned of MCC-Apthis month because importers tradipraisement (East) has taken the said initionally rush to get the used car imports tiative in connection with the formation of cleared by December 31. This is so bePRV Cell into the Collectorate after recause only up to three-year-old used ceiving audit paras by the Directorate cars could be imported one of three General of Internal Audit-Customs at regschemes; namely the personal baggage, ular interval. transfer of residence and gift. The start “The exercise will certainly helps in reof the new calendar year starts from covering the leaking revenue of the ColJanuary 1 turns the age of three-year lectorate in clearing the consignments old used car to a four-year used vehicle during July-December-2014,” sources the importers rush to clear the used added. It is pertinent to mention here that cars imported by them by December 31 the Post Release VeriKication (PRV) Cell because failure to do so turns a three already exists in the MCC-Appraisement year old car into a four year old car. And (West) and recovers around Rs 150 milif this happens a used car imported unlion to 200 million on monthly basis. der any of the three schemes mentioned Separately, the Appraisementabove become useless because used East has launched a drive to recars over three year are not allowed to cover stuck-up revenue by issube imported. Failure to clear a used car ing notices to importers to clear by December 31, thus, means total loss their consignments, sources said. to an importer because a four-year The drive is expected to help old used car could not be imMCC of Appraisement-East colported into the country. lect an additional Rs 500 milThe automation of the veAdditional Collector lion in stuck-up revenue. The hicle clearance process on sources further informed that the WeBOC Customs clearZeba Bashir to look the customs authorities had isance system, which offers after cell and assist sued notice under Section 82 of online real-time automated the Customs Act 1969 to huncalculation of custom duty high-ups to carry out dreds of importers on Decemand taxes as well ensuring audit process ber 10. The notice had asked the that all other requirements importers to clear their consignare met and that all the ments within 15 days, failing which needed information is prothe goods would be auctioned. vided, recently would help the The Appraisement-East has also Collectorate help handle the used car taken a number of measures for the exclearance rush. peditious clearance of used car imports
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NATIONAL
DECEMBER 23 - DECEMBER 29, 2014
fBR to take action against 40 fake registered companies
KARACHI: The Federal Board of Revenue FBR has traced 40 fake companies that got millions of rupees under the head of illegal sales tax refund and input adjustment. The tax staff registered the companies without confirmation of addresses. Most of the companies got Rs 30 million average by false claims. It has become very easy to get a large amount of money in this way. FBR has decided to take stern action against such companies.
weBOC becomes operational at wahga border LAHORE
MAHMOOD IDREES
fBR to educate people about benefits of paying taxes
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Board is going to launch mass awareness campaign with aim to sensitise people to pay taxes in time
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WeBOCairmanifest systemtobe implementedonJan6 he air manifest system underWeBOC is in pilot testing phase and the module will be implemented on January 6, 2015. Directorate of Reforms and Automation Additional Director Saadia Sheraz briefed CustomsToday about one of the most cherishedWeBOC modules to bring the clearance of air cargoes. She said that the air manifest would be implemented at all the Air Freight Units of Pakistan Customs at all the airports on the 6th of the next month. After the implementation, a series of relevant air modules would be launched in phases.These include the cargoes handled by courier companies, air transit, air transshipment consignments and immediate clearance group.The implementation of air manifestation and the upcoming modules would help immense amount of time and energy for both the customs and the importers because it would help to effortlessly reconcile GDs because till now Air Manifest was filed manually under One-Custom Clearance System while the GDs are being filed through theWeBOC automated clearance system. —CT Report
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ISLAMABAD
MuHAMMAD ARSHAD www.customstoday.com
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he low number of income tax returns has forced the Federal Board of Revenue (FBR) to launch a campaign to create awareness among the people about the beneKits of paying taxes. “The Board-n-Council has asked the Facilitation and Taxpayer Education (FATE) unit to improve and reKine the proposal of the awareness campaign,” a well-placed source at the FBR told Customs Today. “Need for launching the mass awareness campaign through all forms of media, electronic, print as well as state owned radio and television was felt because the number of returns was not acceding beyond 850,000 whereas the number of National Tax Number (NTN) holders is around 4.5 million in the country,” the source said. The source said that in the mass awareness campaign, the FBR would tend to introduce main tax linkages with the national development as well as inform the masses about beneKits of paid taxes to the country. “The mega campaign will be launched in assistance with donor agencies, mainly German donor agency and hopefully the World Bank may also move step forward to contribute its share in bearing the expenses of the campaign,” the source added “Apparently, FBR is going for this mass awareness campaign with an
— Exclusive Customs Today photo
heWeb-Based One Customs (WeBOC) software has become operational atWahga border. The software has been made functional after the examination process completed. More computers have been installed to facilitate traders and clearing agents in filing their goods declarations (GDs). Sources said the customs officials were using bothWeBOC and One Customs as the traders and clearing agents could face difficulties if the old version of software was replaced withWeBOC immediately.The Pakistan Revenue Automation Limited (PRAL) officials at Wahga have offered support to the traders and agents. A PRAL official said that agents came to his office and filed their GDs in the supervision of the official staff several times until they learnt it properly. He also said that workshops had been conducted to train the traders and agents in this regard. He said that traders could complete their paper work within 2-3 hours by using the new technology instead of waiting for a whole day. On the other hand, customs authorities have asked all traders and clearing agents to get their registration and IDs soon. Talking to Customs Today, clearing agents and traders said that trade of fresh items such as like vegetables and fruits needed speedy clearance process.
aim and objective to sensitise people to pay due taxes well in time in an appropriate manner, but in real number of complying tax payers is decreasing instead of increasing despite all efforts being made by FBR,” the source added, saying that FBR was not only striving for increasing number of NTN holders but tax return Kilers too. The source said that FATE Wing moved the proposal for launching the mass awareness campaign in an informal Board-n-Council meeting of the FBR held this week and Board-n-Council asked the mover to further reKine the proposal n present against along with inclusion of relevant topics and clarity of
fBR Chairman tariq Bajwa
prior to opting for seminars and workshops, consultants will also be hired to make adequate preparations
PRAL refuses to provide clearance data to Internal Audit P
KARACHI
SOHAIL RAB KHAN www.customstoday.com
RAL, a private organisation meant to handle clearance data of Pakistan Customs, has refused to provide data to the Directorate General of Internal Audit-Customs, it is learnt. Sources revealed that the administration has asked the authorities concerned of Internal Audit to contact the Directorate of Reforms and Automation to get clearance data of import. The sources termed the said attempt of PRAL a conspiracy, as the Internal Audit-Customs with the consent of Federal Board of Revenue (FBR) authorities, was working on very sensitive cases like gold smuggling scam and recovery of outstanding revenues from the telecommunication and other sec-
Refusal of PRAL in order to provide import/expo rt data to will affect revenue collection
tors. “The refusal of PRAL in order to provide import/export data to Internal Audit-Customs will also affect FBR revenue collection, as billions of rupees audit paras have been established and sent to the Collectorates across the country by the Internal AuditCustoms,” they added. They said that the Federal Board of Revenue (FBR) top authorities should take immediate notice of non-attending and not providing the clearance data to Internal Audit-Customs. The FBR has already paid heavy losses due to the negligence of PRAL administration in securing the data. It has been reportedly said that PRAL has lost some data linked with Afghan Transit Trade, which is certainly a matter of grave concern for the Federal Board of Revenue (FBR) and Pakistan Customs.
objectives. The source added that Board-nCouncil also asked the donor agency to further furbish its input on the subject to make the exercise a success story. Hopefully, the proposal will be Kinalised by the end of this month and mass awareness campaign will be launched from January 2015, the source added, saying that seminars, workshops, references would be organized in major cities and towns for public awareness. “Prior to opting for seminars and workshops, consultants will also be hired to make adequate preparations for these activism,” the source added.
Excise Dept withdraws fine on token tax until 31 Dec he Excise andTaxation Department has waived off 100-percent fine on token tax until 31 December. According to excise officials, the penalty has been waived off on the request of citizens who paid their income tax but not token tax. The department has devised a system for filer and non-filer citizens. A person who files his income tax returns is a filer and for such citizens token tax on vehicles from 1001CC to 1300CC was Rs 1800. For non-filer citizens, token tax was Rs 3600. A vehicle owner who is not filing income tax returns falls in the category of a non-filer citizen. Citizens were demanding for extension of the deadline tax because they did not receive tax return file before due date. —CT Report
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NATIONAL 03
DECEMBER 23 - DECEMBER 29, 2014
Excise Dept to issue notices to token tax defaulters
KARACHI: The Sindh Excise Department has decided to issue notices to the car owners that did not pay token tax. A list of more than 5,000 cars has been issued from the Punjab DG Office to trace the tax defaulters. The final list of defaulters is being prepared from all over Punjab in this regard.
ANFseizesdrugs worthRs3.78billion nti-Narcotics Force (ANF) has seized 3.391 tons charas and 58.5kg heroin worth Rs3,780 million in seven operations conducted in Islamabad, Rawalpindi, Attock, Jhelum, Karachi and Qilla Abdullah and arrested six accused including a Nigerian national. As per details, ANF Karachi, on pursuance of information, intercepted a Truck No TK-241at Super Highway near toll plaza and recovered 30kg heroin. The truck was loaded with soap stones, and heroin packed in a plastic bag was tactfully concealed under the layer of the stones. The driver of the vehicle was taken into custody on the spot. According to initial investigations, Heroin was to be delivered at Kemari area. It was being transported from Peshawar to Karachi for handing over to some other Narco Gang for smuggling abroad. ANF Quetta carried out a successful intelligence led operation and seized 3,381kg charas from general area of Killi Habib Zai, Dashti Lorah, Tehsil Gulistan, District Qilla Abdullah. The drug was packed in 73 bags, each contained 46/47kg charas and was concealed in the cuttings of mountainous terrain. As per initial investigations, the consignment was placed for handing over from one Narco Gang to another. After receiving a safe signal, the drugs were finally to be shifted to some safe location at Coastal Belt of Balochistan for smuggling abroad via sea route. ANF Rawalpindi, acting upon a tipoff, intercepted a suspected Toyota Corolla Car No LWN-0713 near Burhan, Motorway Interchange, District Attock. During search, 24kg heroin was recovered from the car. The heroin was being smuggled from Peshawar to Faisalabad for handing over to another Narco Gang. An occupant of the car namely Rakhman-ud-Din r/o Peshawar was also arrested. —CT Report
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fBR high-ups term peshawar attack gravest tragedy Customs and FBR officials in Lahore hold funeral prayers in absentia for martyrs of Peshawar LAHORE/ISLAMABAD
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he officers and staff of the Federal Board of Revenue (FBR) Headquarters gathered to pray for martyrs, including 132 innocent schoolchildren, who lost their lives during a drastic attack by TTP terrorists in Peshawar on December 16. All the officers and staff of FBR (HQ), including Chairman Tariq Bajwa and all the members, gathered in the auditorium and prayed for the victims of the tragedy. Those who embraced martyrdom included Army Public School Principal Tahira Qazi, sister-in-law of Riffat Shaheen Qazi, Member Facilitation and Taxpayer Education. They prayed that God bless the martyrs with the highest place in heaven and grant courage and fortitude to the grieving families of the victims as well as to the nation. Speaking on the occasion, FBR Chairman Tariq Bajwa condemned what he termed as the gravest tragedy in the history of Pakistan, measurable in scale only to the events of 16 December 1971. He said the terrorists had committed this dastardly act to avenge the ongoing Zarb-e-Azb Operation and demoralise the nation. “However, their efforts to dent the morale of the nation would never succeed and the entire nation stands united today to frus-
— Exclusive Customs Today photo
ISLAMABAD: fBR officials pray for those who lost their lives in dastardly attack in peshawar on 16 December.
trate and fight such enemies of the humanity,” he said. The chairman emphasised that the only way to root out this menace from the society is to isolate the extremist elements from ranks and work together for the prosperity of the country. Separately, customs officials and FBR employees in Lahore held funeral prayers in absentia for martyrs of Peshawar tragedy and condemned the unfortunate incident.
Officials in Lahore hold funeral prayers in absentia for martyrs
The employees of FBR RTOs and Large Taxpayers Unit gathered for the prayers in absentia. Federal Revenue Alliance Employees Union (FBR) Union President Mian Abdul Qayoom and other employees prayed that may the departed souls rest in eternal peace and. May God grant the grieiving families courage to bear the pain with fortitude. On the occasion, Amir Nazir, Shahzada Butt were also present.
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04 NATIONAL
DECEMBER 23 - DECEMBER 29, 2014
Rangers arrest smuggler at wahga border
LAHORE: The Punjab Rangers arrested a smuggler at Wahga border after a clash and firing. After flag lowering ceremony, the Punjab Rangers arrested smuggler, identified as Shakeel, and recovered 36 bottles of alcohol. However, his accomplice fled from the occasion during firing. Shakeel and his accomplice were trying to smuggle alcohol from India to Pakistan.
fDI inflow into pakistan enables govt to repay $1009.6 million loan
FBR union vows to raise voice for class 4 employees LAHORE
MAHMOOD IDREES www.customstoday.com
ISLAMABAD
MuHAMMAD ARSHAD www.customstoday.com
he CustomsValuation director general (DG) has reserved order regarding a review petition to redetermine customs value of paraffin wax imported from India. According to details, Advocate Umer Farooq pleaded the case before Customs Valuation DG Samaira Nazir Khan. A departmental representative was also present.The review petition was filed on behalf of Sajid Chemicals. It requested the DG to re-determine the customs valuation of paraffin wax of India-origin which was last determined over three years ago videValuation Ruling No 380 dated October 1, 2011.The petitioner had filed a constitutional petition at the Sindh High Court (SHC) last year.The petitioner’s counsel had requested the court to revise the customs value of paraffin wax in view of the law settled by the SHC in a Sadia Jabbar versus Federation of Pakistan case reported in the Law Journal of PakistanTest Case Law (PTCL) 2014, Case Law 537 in which the SHC ruled that a valuation ruling must be revised after 90 days. —CT Report
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Customs seizes imported vehicle, smuggled goods he Customs Intelligence and Investigation has impounded imported vehicle Stavic and LEDs along with spare parts. The officials launched a crackdown on smuggled goods after receiving a tipoff. Customs Intelligence and Investigation Additional Director Nisar Ahmad formed a special team in this regard.The team impounded goods that were being smuggled to Multan from Lahore.The worth of seized goods is almost Rs 1 million. The officials have registered a case after the owner failed to provide import evidence. —CT Report
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— Exclusive Customs Today photo
Order reserved in determination of customs value of paraffin wax
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he inKlow of foreign direct investment (FDI) into Pakistan is on the rise and the country received $2640.9 million FDI last year. The increased amount of FDI enabled the government to pay $1009.6 million to the foreign countries during the Kiscal year 2013-14. FDI is direct investment abroad where the investors have a complete control over their capital. There is difference between portfolio investment and foreign direct investment. Hence in case of FDI, the investors have direct effective control or managerial involvement on their investing capital while in case of Portfolio investment they have no managerial involvement and control. A source in the Finance Ministry told this scribe that more proKitable areas identiKied for FDI in Pakistan were energy sector, information technology and telecom, education, engineering, mining, machinery, construction and pharmaceutical sector. “Thus, FDI improves the social welfare of the society by providing employment opportunities, increasing per capita income, reducing poverty, improving trade and accelerating economic development of the country,” the source said, suggesting that for enhancing more FDI Pakistan needed to encourage physical infrastructure and reduce political instability and terrorism, which were the main hindrance in the way of FDI inKlow.
Profitable sectors identified for FDI are energy, information technology, telecom, medicine, education, engineering, mining, machinery and construction The source said that usually, FDI made by large multinational corporations (MNCs) through merger and acquisition, or through the construction of a new facility, moreover, FDI composed of three parts as given: Equity capital: It was the foreign direct investors’ purchase of shares of a Kirm in a country other than its own shares. “The government desires to encourage investors in order to support investment activities in Pakistan because Pakistan is gateway for foreign investors into Central Asia through
he Federal Revenue Alliance Employees Union (FRAEU) has decided to raise voice for class-4 employees of the Federal Board of Revenue. A meeting of the FRAEU members was called on to outline a strategy to discuss misbehaviour of the RTO highups towards lower staff and a delay in promotions. FRAEU President Naeem Shah presided over the meeting. Vice presidents and other members also attended the meeting. The president sought suggestions from the members to address the issue. All members urged the president to take practical steps instead of writing letters as the chief commissioners did not respond. A few weeks ago, class-4 employees had complained that the RTO chief commissioner and other high-ups misbehaved with them. FRAEU had assured the complainants that a meeting would be held with the chief commissioner. FRAEU wrote letters to the chief commissioner, but to no avail. The FRAEU president has decided to hold a protest demonstration in the next week. He said the Departmental Promotion Committee held a meeting around two months ago, but the RTO-I Lahore chief commissioner hindered promotions. He also said that a class 4 employee was hospitalised due to the misbehaviour of high-ups. He added that FRAEU was the only representative of the FBR employees and all steps would be taken for their rights.
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Political instability and terrorism are main hindrance in FDI inflow
which the volume of external trade can be expanded,” the source observed. “SigniKicant improvement in the country’s overall macroeconomic environment and sound policies helped attract relatively large inKlows of FDI in Pakistan,” the source said. He said further that as per investment friendly policies devised by the government, the foreign and domestic investors could direly invest in every sector and even there were no limitations on bringing in or taking out capital from Pakistan.
Customs Export stops issuance of rebate claims to Atlas Honda, Indus Motors T
KARACHI
SOHAIL RAB KHAN www.customstoday.com
he Model Customs Collectorate (MCC) of Export has halted issuance of rebate claims to Atlas Honda Company, Indus Motors Limited and others automotive companies, it is learnt. Sources informed Customs Today that the issuance of rebate claims to those automotive companies have been stopped on the directives of the FBR, as they have enjoyed double beneKits under SRO-565(I)/2006 and SRO209(I)/2007.
Sources revealed that MCC Export Collector Manzoor Memon has asked the authorities concerned to scrutinise the import and export
data of those automotive companies including Atlas Honda Motors, Indus Motors before issuance of rebate claims. “The automotive par-
ties, particularly Indus Motors and Atlas Honda, are enjoying double beneKit in rebate claims and this is why the Pakistan Customs authorities have decided to check the import and export data of those parties and then to issue the rebate claims,” they added. The sources further disclosed that the MCC-Export has faced pressure as the companies are using their inKluence to get the rebate claims issued. The exporters have already demanded to decrease the rate of duty drawback on the basis of the Kluctuation in dollar rates in previous and present years.
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Customs Today is an in-depth newspaper, which covers each and every aspect of not only customs, but the entire business activities KARACHI
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revailing energy crisis, smuggling, high customs values and political impasse are the main factors which are adversely affect the import and export of the country, said Karachi Chamber of Commerce and Industry (KCCI) President Iftikhar A Vohra. Expressing his views during an exclusive interview with Customs Today, the KCCI president said that the GDP growth is on a decline due to decrease in export and import of the country. Vohra urged the government authorities to devise a comprehensive strategy in order to improve the law and order situation of the country. Vohra suggested that the government and the Pakistan Tehreek-e-Insaf to adopt the way of dialogue/table talk in order to diffuse the tension prevailing in the country. Commenting on the monetary policy, the KCCI president urged the authorities concerned of government and FBR to device simple Kiscal policy for the taxpayers and traders. On the occasion, he demanded exemption to regular importers from examination procedure, as it is creating grid-lock at terminals and also increase in cost of doing business, as the regular importers are compels to pay demurrage and detention in resulting of delay in examination process. He said that the laboratory certiKicate issued to the importers should be valid for at least six months, as the laboratory charges are also put an extra burden on the pockets of the importers. Lambasting the mindset of bureaucracy, Vohra said that the bureaucracy considers that its decisions are in the favour of trade and importers without taking them into conKidence. To a question, Vohra rejected the statement of FBR Member IT Raana Ahmed on newly introduced tax-collecting system IRIS in which she stated that those who are not willing to pay tax are criticizing IRIS. The president made it clear that the taxpayers wanted to pay legitimate duty/taxes, but unfortunately, the authorities concerned of the FBR have failed to increase its tax net and creating complications into tax system by the passage of time have also irked the regular taxpayers. “The government and FBR authorities should streamline the tax-collecting system and introduce trouble-free tax collecting system with the proper consultation of stakeholders,” he urged. President KCCI further suggested the authorities concerned to conduct regular meetings with all stakeholders before implementation of any new law.
To a question, Vohra disclosed that the topmost agenda of the chamber for 2015 was to Kind ways to uproot smuggling. He said that the KCCI would hold an anti-smuggling seminar in the upcoming year. He termed smuggling a “direct threat” to industries and economy of the country. During the interview, the KCCI president revealed that smuggling goods worth around $15 billion to $20 billion come into the country through different routes, including Afghan Transit Trade (ATT). Highlighting the smuggling activities, Vohra disclosed that the smuggling of plastic granule, tea, tyres, tiles, clothes, diesel and petrol through Iranian border has been increased which severely damages the economy of the country. Came up with some suggestions, the KCCI president was of the view that the customs authorities should form a border security force and establish check posts in Chaman, Torkham and other borders to end smuggling. To a question, the KCCI recommended the FBR authorities concerned to reduce duty/taxes tariff in order to increase imports. Responding to another question, Vohra said that the customs authorities should convene the meeting of stakeholders and importers before issuance of any valuation ruling and remain the validity of the said issued valuation ruling up to at least 90 days. Commenting on the recent law and order situation of Karachi, Vohra said that there was a decline in kidnapping for ransom cases of the industrialists and businessmen, while the
graph of street crimes has increased in recent days. He made it clear that police should be depoliticised for improving law and order and effective intelligence system should be evolved in order to eliminate crime. Vohra lauded the performance of Rangers personnel in eliminating crime and restoration of law and order in Karachi, adding that the absence of local bodies system in the city was another issue which deteriorated the infrastructure of Karachi.
KCCI president urges government to device simple fiscal policy for taxpayers and tra
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SPECIALREPORT 07
aders
— Exclusive Customs Today photos
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08 EDITORIAL
DECEMBER 23 - DECEMBER 29, 2014
Founder & Chairman Zulfiqar Ali Editor Rahil Yasin editor@customstoday.com.pk For advertising & subscription marketing@customstoday.com.pk +92-300-4009261 www.customstoday.com Phones: 042-35781643-4, Fax: 042-35781645 Address: 627, Siddiq Trade Centre, Gulberg, Lahore
EDItORIAL
Heading toward tax reforms ccording to the newspaper reports, Finance Minister Ishaq Dar has told the Tax Reforms Commission to finalise a report about deliberations and proposals which were held with various stakeholders to introduce tax reforms in the country. Addressing the concluding session of the commission meeting, he said that the commission should also outline the proposals in its interim report to enable the government incorporate its recommendations in the annual budget 2015-16. The commission is considering various proposals to bring structural changes in the tax system and facilitate the taxpayers.The reforms will cover a business-oriented tax policy, tax collection methods, expansion of tax base,security issues on the country’s borders, anti-smuggling measures and assistance for the taxpayers. The reports also suggest that various stakeholders have been consulted on the issue, including the officials of the chambers of commerce and industry, Pakistan Business Council and technocrats. The tax base in Pakistan is very low as compare to other countries in the region and steps are required to enhance tax net. On another note, a policy should be adopted to respect the dignity of taxpayers. In modern economies, taxpayers are considered as members of the privileged class and are given respect in every field of life. In the Pakistan, the matter is probably contrary to it. The economy of Pakistan is under pressure for the last many years and mishandling of the tax issues and embarrassment of the business community will not serve any purpose.The tax reforms in Pakistan are long been overdue to overhaul the tax system in the wake of changing economic scenario in the world. The commission is mandated with preparinga draft of recommendations to gradually withdraw presumptive tax regime, remove anomalies from the universal self-assessment scheme, exploit the potentials of value added tax and ensure implementation of tax reforms. In a practical sense, the issue of sales tax is haunting small traders like a demon as a few unscrupulous elements within the business community give the buyers fake sale receipts without any record of the payment of sales tax on the official level. As a result, the fake receipts land a common businessman in a lockup or he is forced to pay fine without any fault of him. It is a need of the hour to change the existing sales tax regime and a procedure should be adopted to fix the sales tax evaders. A proposals is also under consideration to replace the standard rate of 17 percent sales tax by introducinga single stage sales tax. In either case, one can hope that the reforms in the tax system will not only help increase the tax collections, but will also broaden the tax net.
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$6.7 billion IMf loan package LAHORE
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DR AftAB AfZAL
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he Kinancial wizards in the government circles must have been thumping their chests on the approval of $6.7 billion loan package by the board of International Monetary Fund.The government had soughtthe loan apparently to revive the sagging economy, avert balance of payments problems and rebuild depletingforeign exchange reserves. The package under a three-year Extended Fund Facility wasapproved in August awaiting the IMF board’s decision and was conditionedwith the Kiscal reforms promised by the government.The State Bank had nearly $5 billion foreign currency reserves in August, which were hardly enough for Kive weeks of imports. Unfortunately, Pakistan is one of those countries which have the lowest tax-to-GDP ratio in the world due to rampant tax evasion and low tax base. In the current scenario, the IMF will provide an initial tranche of $540 million and will pay the rest of the loan
with gradual reviews and views of the programme over a period of three years.According to a study of the Asian Development Bank, the country needsup to $9 billion credit to pay outstanding debt of $5 billion which is due on an $11 billion IMF loan package approved in 2008 to avert the balance of payments problem. The IMF, however, suspended the programme two years ago after the government had failed to meet economic and reform targets.The government has now withdrawn various subsidies on electricity as well as is pursuing the suspected tax evaders to qualify for the IMF loan. According to the experts, Finance Minister Ishaq Dar is too eager to secure foreign loans as he is vying for $12 billion loans over the next three years to take off the burden of external debts. However, the burden of loan has been piling up to reach $14.55 billion for the last Kive years, belying the government claims that it wants to smash the begging bowl. The Kiscal policies and outlook of the Pakistan Muslim LeagueNawaz government is not different from that of the previous Pakistan People’s Party government when it comes to the
Government will get $6.7b from the IMF and is expecting $1 billion from the Asian Development Bank and $1.5b from World Bank
Kinancial management. Every hair of the nation has been mortgaged and off and on dollar injection by the donor agencies will only bring a temporary respite to the chronic Kiscal ills. The PPP government had opted for reckless borrowings from the State Bank as well as foreign agencies, landing the nation in the debt crisis. The panacea of economic woes lies in industrial development and the dream of prosperous nation cannot be fulKilled until a sincere and able leadership sits on the driving seat. The government will get $6.7 billion from the IMF and is expecting $1 billion from the Asian Development Bank, and $1.5billion from the World Bank as compare to the PPP government which had borrowed $9.65 billion during its Kive-year tenure. The problem before the Kinancial experts is not the achievement of loans, but spending of loans and repayment of loans at high markup rate. Many a time it happened that the government secured loan for a development project, but the project was shelved and the money so obtained had been wasted away. This government should have to stop this kind of anomalies if it really wants to serve the nation.
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NATIONAL 09
DECEMBER 23 - DECEMBER 29, 2014
traders announce strike as govt refuses to take SRO-608 back
ISLAMABAD: The government had promised to remove SRO- 608 by the first week of December 2014, but to no avail. The traders have decided to go on strike on December 31 throughout the country. During a meeting, the government officials ensured the traders on November 28 to remove the SRO, but later Finance Minister Ishaq Dar on his return from Russia backtracked during a meeting with FBR Chairman Tariq Bajwa. This has compelled the traders to announce a countrywide strike on December 31.
Officials‘ignore’ Collector Saleem’s directions regarding renovation KARACHI
CuStOMS tODAY REpORt
‘No proposal to permit Indian wheat to Afghanistan through land’ Commerce Ministry would take decision with permission of stakeholders concerned
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ISLAMABAD
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
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he Commerce Ministry has categorically denied having any proposal under consideration for provision of land rights for Indian wheat for export through Pakistani land route. Transit trade facility for India, for business with Afghanistan, has a strategic dimension to it, rather than being purely a commercial activity and India wants to export over a million tonnes of wheat to Afghanistan through Pakistan’s land route which would be detrimental to our Klour milling industry. “At present, there is no proposal under consideration to allow transit of Indian wheat through land route (Wahga border or elsewhere),” a source privy to Commerce Minister Khurram Dastgir Khan said. He added that export of Indian wheat in transit to Afghanistan through seaports was allowed. The source said that under the Afghanistan-Pakistan Transit Trade Agreement (APTTA), signed in 2010, exports from India, including wheat, were not allowed in transit to Afghanistan through Wahga border. “The Commerce Ministry has neither received any request from Indian side to allow Indian exports, including wheat, in transit to Afghanistan through Wahga border nor is there any proposal to allow
such transit facility to India under consideration,” the source added. However, the source said that the ministry being the custodian of interests of business community and would take any decision in this regard with the permission of concerned stakeholders after holding immense deliberations and discussions with concerned stakeholders. The source added that Pakistani milling industry took exports to
Commerce Minister Khurram Dastgir Khan Afghanistan as an extension of business for proximity and high proKits and subsidized Indian wheat would drive Pakistani milling industry out of the Afghan market and such a situation was not acceptable to MoC at any cost. The source added that it was not only the general subsidy on farm inputs made the Indian wheat cheaper as compared to Pakistan, but the Indian government had also offered a speciKic $50 per tonne addi-
tional subsidy to exporters, driving the price further down. “Indian wheat would cost PKR 2,900 per tonne in Afghanistan, against Pakistani commodity at Rs 3,400 per tonne. This difference of Rs 500 per tonne is bound to tilt the competitive edge in favour of the Indian wheat and Pakistan would lose its traditional market that consumes over half a million tonne of Klour from Pakistan” the source added.
LCCI appeals to fBR chief regarding tax refund claims To,
Tariq Bajwa FBR chairman Respected sir,
You are requested through this letter to expedite stuck-up sales tax and income tax refund claims. The Federal Board of Revenue is hampering the growth of the most productive sectors by denying the exporters and manufacturers their right of refund. The delay in release of huge funds that runs into billions has triggered serious liquidity crunch for the exporters and manufacturers that might lead to closure of several industrial units. The authorities concerned should take realistic view of the matter and allow the refunds of sales tax and income tax to exporters and manufacturers at the earliest, who were facing severe hardships. The process to get refunds is so lengthy and
— Exclusive Customs Today photo
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CuStOMS tODAY REpORt
— Exclusive Customs Today photo
fficials of Model Customs Collectorate Appraisement-West have halfheartedly implemented Collector Muhammad Saleem’s directions regarding renovation of Appraising Intelligence Branch. It was observed that the renovation/refurbishment work has been completed without bringing necessary changes ordered by Collector Saleem. The offices have been painted while no new furniture and ceiling fans have been inducted during the renovation work. Collector Saleem during his visit to the AIB/R&D Section in November directed the authorities concerned to present a summary of the allocated funds required for the renovation of entire AIB/R&D Section, including law/legal branch and others, so that the collectorate can issue the required funds for the renovation work respectively. Collector Saleem asked the AIB/R&D Section officials to refurbish the entire branch on contemporary lines to give a good impression to the visitors and importers. In this connection, Rs 0.5 million had been allocated. However; the funds have been utilised completely in the renovation work of AIB/R&D Section. Now, it is a matter of great concern to the authorities concerned of the Collectorate to find out amount, which had been utilized in the renovation of AIB/R&D section.
cumbersome that sometimes it takes months for a manufacturer or an exporter to get his money refunded. The businessmen have now started feeling the pinch as the businesses were already in deep troubles and experiencing toughest times because of multiple internal and external challenges, including an acute shortage of electricity and gas. Now the delay in release of their money is adding to their miseries. It is a matter of concern that despite clear instructions of Finance Minister Ishaq Dar to release sales tax and income tax refunds at the earliest, the officials concerned are using delaying tactics and creating hurdles for the businessmen. You are hereby urged to take notice of the situation and issue orders to expedite stuck-up sales tax and income tax refund claims. Thanks and regards, Ijaz A Mumtaz LCCI President
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10 PICTORIAL
DECEMBER 23 - DECEMBER 29, 2014
Excise Dept to issue notices to token tax defaulters
KARACHI: The Sindh Excise Department has decided to issue notices to the car owners that did not pay token tax. A list of more than 5,000 cars has been issued from the Punjab DG Office to trace the tax defaulters. The final list of defaulters is being prepared from all over Punjab in this regard.
ISLAMABAD: Finance Minister Ishaq Dar chairs a meeting to review progress on Nawaz Sharif kidney Hospital Swat.
ISLAMABAD: RCCI President Asad Mashhadi and LCCI President Iftikhar A Vohra pose during Pak-Afghan Trade Opportunities Conference at a local hotel.
ISLAMABAD: Federal Commerce Minister Khurram Dastgir addresses reporters regarding increase in trade due to GSP Plus.
ShahidJatoiandIqbalKhanreviewsecurityarrangements KARACHI
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CuStOMS tODAY REpORt www.customstoday.com
he Federal Board of Revenue (FBR) high-ups have reviewed measures taken for the security of FBR headquarters and directed the organisations concerned to further cement the security arrangements. FBR Member Admin Shahid Hussain Jatoi and Chief Admin Muhammad Iqbal Khan visited various areas of the FBR Headquarters and inspected security measures and directed the ofKicials concerned to heighten security. A source said that extra security measures had been taken and timing for opening and closing of gates had been speciKied. “Even functional condition of weapons
and arms present with private and ofKicial security guards was also reviewed,” the source added. “Existing security SOPs were minutely discussed and employees were directed to ensured their entry through front gate” the source said adding that employees had been advised to wear their service cards. “No visitor will be allowed without identiKication” the source added saying that although these measures were already being implemented yet concerned authorities had been asked to further be strengthened in the wake of prevailing situation. “The Kiled ofKicers have also been directed to ensure their security with collaboration with security agencies,” the source added. “Besides, the security measures, general arrangements made
fBR Member Admin Shahid Jatoi
to facilitate the employees of FBR headquarters have also been reviewed,” the source said, adding that as it was a national level ofKice, therefore, other facilities
were also analysed including improvements brought about in cafeteria. “The old dark one-room cafeteria has been replaced with a new,
airy, well lit, well furnished,” the source said, adding that the FBR Member Admin directed the supervisory ofKicers to pay random visits to cafeteria to take meal and tea to ensure implementation on the prescribed directions. He also directed the cafeteria management to ensure charges from subscribers at subsidised rates along with improve the menu must according to hygienic standards. Similarly state of horticulture was also reviewed as the Member Admin visited side lawn and issued directions for further improvement. The FBR has been several-time winner in Klower shows among ofKices located on the Constitution Avenue organized by Capital Development Authority or any other organisation.
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CARTOONSSPECIAL 11
DECEMBER 23 - DECEMBER 29, 2014
KtBA condemns killing of innocent schoolchildren
KARACHI: The Karachi Tax Bar Association (KTBA) strongly condemned the banned terrorists outfit Tehreek-eTaliban Pakistan for killing 140 people, including 130 schoolchildren in Peshawar on Tuesday. A meeting was chaired by KTBA President Syed Wasim Hashmi in this regard. Committee members and former bar presidents were also present. During the meeting, the KTBA demanded that the government take measures to protect the life and property of citizens. The bar urged the government to make special security arrangements for schoolchildren.
government decides to withdraw tax on cotton seedcake MULTAN
IMRAN ALI KHAN
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he government has withdrawn sales tax on cotton seedcake after meetings with the Pakistan Cotton Ginners Association (PCGA). PCGA Chairman Haji Hafeez Anwar said this while addressing a press conference. He was Klanked by former PCGA chairman Mukhtar Baloch and former senior vice president Asim Saeed Sheikh. He said the government has given consent on waiving off new tax on cotton seedcake after dialogue on cotton crisis. The government dialogue team consisted of Federal Board of Revenue Chairman Tariq Bajwa, Finance Minister Ishaq Dar, Commere Minister Khurram Dastagir Khan. The decision to withdraw tax will be approved in the next meeting of Economic Coordination Committee (ECC) on Friday. The Pakistan Cotton Ginners Association demanded that the
government ban import of Indian cotton yarn. “The government should for-
mulate better methods to overcome the further loss of cotton ginners and cultivators,” they
IOCO carries strict scrutiny before issuance of certificates to importers
added. The government should take timely decision for the betterment of cotton industry and
finance Ministry to use $20 million ADB loan for privatisation and power sector reforms he Finance Ministry will use $20 million loan for State-Owned Enterprises Reforms (SOERs) to support privatisation and power sector reforms. The loan will be obtained from the Asian Development Bank (ADB), a source told Customs Today. Pakistan became a founding member of ADB in 1966. Now ADB is one of Pakistan’s largest development partners in terms of both the number of loans and the total funding it has provided. As of 31 December 2013, ADB provided more than $24 billion in loans, in addition to more than $200 million in grants for over 350 technical assistance projects The source said that ADB considered that Pakistan has the potential to achieve higher growth to accommodate a rapidly growing working-age population as the country had considerable natural resources and ample scope to improve agricultural productivity, and to expand markets for the manufacturing and service sectors. “Assistance from ADB supports government’s goals of facilitating structural change, promoting investment, and improving institutional effectiveness,” he said. He added that with more than $17.8 billion disbursed for infrastructure, services, and reforms from ordinary capital resources and the Asian Development Fund, the ADB has provided a total of 307 loans. The source added that ADB and the Finance Ministry had implemented the country partnership strategy, 2009-2013, a $4.4 billion lending program to support the government’s goals of facilitating structural change, promoting investment, and improving institutional effectiveness. “Assistance from ADB has strengthened Pakistan’s social and environmental safeguards by providing technical guidance, and by improving monitoring and resettlement practices as ADB has also helped integrate environmental concerns into government projects and programmes,” the source added. The source said that ADB has supported the conflict-affected Federally Administered Tribal Areas (FATA) with a $44.6 million loan under the FATA Rural Development Project to improve watershed productivity, agricultural productivity, community infrastructure, access to drinking water, and communications in tribal areas. —CT Report
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trict scrutiny process is being carried out by the authorities concerned of Input-Output Co-efficient Organisation (IOCO) before issuance of the final certificates to the importers under SRO-565(I)/2013, CustomsToday learnt. IOCO sources revealed that around 100 provisional certificates have been issued to the importers under SRO-565 and the process of issuance the provincial certificates had been started after the budget for the fiscal year
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2014-15. To a question, sources disclosed that after the issuance of provincial certificates, IOCO has decided to scrutinise the import data and other documents of the importers before issuance of final certificates to ensure transparency. To another question, sources claimed that 50 percent work in connection with the issuance of final certificates to the importers has been completed while remaining task would be completed soon.
In the first phase, they said, the IOCO officials issued provincial certificates to the importers and after scrutinising the import data started to issue final import certificates to parties under the SRO565(I)/2013 which allows them to import the raw-material, machinery and other equipments into the country. Departmental sources said that the process was underway and would be completed by the end of March 2015. —CT Report
formulate a cotton policy to help save the industry from further Kinancial losses, they urged.
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12
DECEMBER 23 - DECEMBER 29, 2014
fBR collects Rs 10 billion more than previous year
KARACHI: The Federal Board of Revenue (FBR) has collected more than Rs 10 billion than the previous year. “FBR has decided to computerise the filling forms. The process will be completed soon. As many as 0.7 million forms had been submitted to pay the taxes. The Federal Board of Revenue has decided to collect maximum revenue. The directions have been given to bring tax defaulters under the tax net so that maximum revenue would be generated for the second time,” The Regional Tax Office gave information.
Customs intelligence joins hands with BMP and DG Khan police to curb smuggling Dg Khan admin proposes Customs Intelligence to establish check post in tribal areas to keep check on smuggling of vehicles and other goods into punjab
Khan in this regard. The meeting discussed strategy to tackle smuggling in DG Khan and adjoining areas. The meeting took various decisions to increase cooperation between the departments. The police and Customs Intelligence and Investigation vowed to Klush out smugglers. DG Khan Commissioner Saqib Aziz presided over the meeting. Customs Intelligence Additional Director Nisar Ahmad, District Police OfKicer Ghulam Mubasahar Maken, Political Assis-
MULTAN
IMRAN ALI KHAN
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he customs intelligence, Dera Ghazi Khan Police and Border Military Police (BMP) have decided to enhance cooperation to curb smuggling from the Balochistan-Punjab border. A meeting was held in Dera Ghazi
tant Shahid Mehboob and District Coordination OfKicer Nadeemur Rehman were also present. During the meeting, the Customs Intelligence and Investigation offered to establish a check post in the tribal areas to counter smuggling. The DG Khan administration proposed Customs Intelligence and Investigation to establish a check post in the tribal areas to keep a check on smuggling of vehicles and other goods into Punjab.
Nisar also proposed to establish a check point near Sakhi Sarwar Road for effective monitoring. The BMP will inform the customs intelligence regarding smuggled vehicles. Non-customs paid vehicles will be seized by the BMP and will inform the customs intelligence. The customs authorities will collect and verify data of Amnesty Scheme for imported vehicles. During the meeting, it was also discussed that some BMP ofKicials
were also involved in smuggling of vehicles. The BMP assured the meeting that strict action would be taken against those who assist smugglers. Nisar Ahmad told the DG Khan commissioner that non-customs paid vehicles or goods were using tribal areas to enter southern Punjab. Taunsa police were ordered to take action as smugglers use Koh-e-Sulemani and Taunsa routes to smuggle goods into southern Punjab.
Transparency,eliminationofcorruptionamustforcountry’s growth:Ikram
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LAHORE
M HAYAt
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mplementation of transparency and elimination of corruption are inevitable for the country to grow. A decade before, values were better practiced while these values are getting worse day-by-day which can cause a total collapse of our norm and values. Billions of rupees Kinancial irregularities are pointed out every year and the same repeats every year. This was the upshot of an exclusive interview of Customs and Petroleum Audit Director General Muhammad Ikram Khan with Customs Today here the other day. The soft spoken Muhammad Ikram Khan, a man of diversiKied qualities,
has vast experience to his credit as he served accounts, audit, customs railways and health department. “Our department points out billions of rupees irregularities every year which repeat every year. We dig out and pursue them at our levels. We have to present audit reports in the Parliament and then starts the work of parliamentarians,” Khan said. However, following auditing the accounts of the departments the paragraphs of objections are taken up with the with the Customs and Petroleum authorities, he said, adding that the raised paragraphs are discussed in the meeting with stakeholders including Finance Department, Customs and Petroleum departments, Federal Board of Revenue and the collectorate concerned. The meeting is normally chaired by
the Chairman FBR and if he is absent, DG Customs and Petroleum Audit chairs it. Khan said that the meeting decides ways forward on the reports and paragraph which must be acted upon by the departments which were audited and if the department fails to take action on the paragraph made by the auditors, they are put before the parliament. The paragraphs upon which the department takes compensatory or corrective actions are highlighted as settled. He disclosed that unfortunately, Customs and Petroleum Audit authorities have never been provided with the complete access to work on and clarify the misappropriations pointed disclosed by the paragraphs. “We have done a series of meetings with the top authorities, moved
Supreme Court and informed the parliament in order to get full success to the required data and record in this regard. If we are given half access how it can be possible for the transparency to prevail,” the Customs and Petroleum Audit DG asserted. He believed that this cannot be possible without the support of the people in the corridors of the power in governments. Ikram is of the view that strict accountability, transparency; openness can resolve various long standing issues with our society. “Rulers’ insincerity has destroyed the very fabric of the society as people’s money is being spent on rulers’ personal publicity while bureaucracy is also not playing its part. Money and reference are the rule of the day merit exist nowhere in the
governmental departments,” he said. A decade before values were better practiced while these values are getting worse day-by-day which can cause a total collapse of our norm and values, the DG highlighted, adding that judicial system also needs complete overhauling because common people are suffering in the courts. “Doctors are looting at private clinics, leaving their assignments in government hospitals while teachers are serving in private schools colleges giving up their governmental assignment. We prefer personal welfare over vast national interest which is alarming,” Khan underscored. There are two things which are inevitable for the society one implementation of transparency and second elimination of corruption,” he concluded.
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