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Vol 2 Issue no. 02

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CALLS FOR ENHANCING INFORMATION CONNECTIVITY PRIME MINISTER NAWAZ SHARIF

INTERNATIONAL CUSTOMS DAY

Pakistan is working on granting Non Discriminatory Access (NDA) status instead of the contentious MFN to India, says Khurram Dastgir | See pAge 03 |

ISLAMABAD

FAIZA ISRAR

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FACIlItAtIngdRypoRt

Customs Department desires to run Hyderabad Dry Port with full capacity and provide all the facilities, says Chief Collector Customs (South) Yahya | See pAge 09 | MeetIng tAx tARgetS

Mid-year corrections are being ordered to meet the targets in the remaining ﬁve months, says FBR Chairman Tariq Bajwa | See pAge 02 | CARtoonS SpeCIAl

| See pAge 11 |

ach year on 26th January, Pakistan Customs joins the other members of the World Customs Organization in observing the International Customs Day. This is indeed a good opportunity to appreciate the important work being done by Pakistan Customs in facilitating international trade, strengthening our backward and forward industrial linkages, and integrating our economy with the rest of the world. However, this is also an opportunity for introspection. Not only do we need to understand the weaknesses that beset our customs structure, but we also need to take a fresh look at our overall taxation paradigm in the context of international best practices and the peculiar requirements of Pakistan, the Prime Minister Nawaz Sharif said. “In this backdrop, I am pleased to share that the Federal Government has already begun work on reforming the taxation system to make all levies, impositions and tariffs business-friendly. A signiOicant part of our larger strategy to strengthen Pakistan’s economy is to promote entrepreneurship, incentivize trade and commerce, and promote industry. An equally signiOicant component of this strategy is to generate higher revenues for social and economic development. The two apparently conOlicting objectives will be harmonized through an optimal expansion in the base of taxes rather than an increase in their rates,’ the Prime Minister Nawaz Sharif said in his message. “From this perspective, this year’s theme of the International Customs Day Communication: Sharing information for better cooperation is very relevant. We need to learn from the experiences of other countries in taxation reform, particularly in the sphere of customs. We need to understand how they have

made the best use of their human resources and the latest available information and communications technology to achieve both high revenue yields and enabling environments for their businesses. We must not restrict our study to the advanced nations of the world, which is often the case, but we should also analyze how the rapidly growing economies of Asia have achieved spectacular results in short time spans,’ the Prime Minister further said. He stated, “I am pleased to note that the Federal Board of Revenue as well as some international and national trade bodies have organized a variety of seminars and events throughout the year to facilitate dialogue and interaction between the customs authorities of different countries. These fora will provide good opportunities to Pakistan Customs and other national stakeholders to share information and achieve better connectivity, which will help in modernization of procedures, efOicient enforcement, and structuring a facilitative trade regime.” “In the end, I would like to commend Pakistan Customs and the Federal Board of Revenue for the strenuous efforts they have made over the past few months, especially in pursuing “information connectivity” with other customs authorities of the world. I feel conOident that Pakistan Customs and the Federal Board of Revenue would play their institutional role in structuring a brighter economic future for all of us,’ the PM concluded.

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NATIONAL

JANUARY 28 - FEBRUARY 03, 2014

unisame showers govt with praise

KARACHI: The Union of Small and Medium Enterprises (Unisame) has appreciated the Finance Ministry decision on shifting payments against exports to Afghanistan from rupee to dollar, saying that the government should also disallow imports payments facility for Afghanistan traders from Pakistan. Unisame President Zulfikar Thaver said the Finance Ministry and SBP had taken the right decision, expressing the hope that the decision would leave a far-reaching impact on the national economy, especially the govt efforts to stabilise forex reserves.

Luxury vehicles being misused by former ports officials he former minister of Ports and Shipping and former chairman Karachi PortTrust are reportedly found to be misusing luxury vehicles bought particularly for foreign consultants working on different ministry projects. A well-placed source in the ministry has informed that despite leaving the charge of the ministry last year a former minister for Ports and Shipping is still using the official luxury vehicle specially imported for foreign consultants and engineers. Following the example set by the former minister, the former chairman KPT Javed Hanif Khan has also kept two luxury vehicles i.e. Vego Double Cabin and Toyota Corolla Car with him. Federal Minister for Ports and Shipping Kamran Michael confirmed the usage of vehicles by the former minister and KPT chairman. The contract of Reconstruction of Berths Project was awarded to a Korean company M/s Sangyong in June 2012 while a British Company M/s WS Atkins was appointed as consultant for top and site supervision. According to the terms of contract, nine vehicles were purchased for this Korean contractor and provided to consultant engineers. However, due to unauthorised usage of the said six vehicles, KPT has purchased four more vehicles, including two luxurious vehicles (Toyota Crown- 3000cc and Toyota Prado), purchased against the government rules and policy of austerity. —CT Report

Bajwa presses for mid-year corrections to recover revenue shortfall ISLAMABAD

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he government is encountering a substantial shortfall in revenue collection including Rs 40 billion in Karachi alone. In this regard, Federal Board of Revenue Chairman Tariq Bajwa has said that mid-year corrections are being ordered to meet the targets in the remaining Oive months. Against the envisaged tax collection target of Rs 2,475 billion for the current Oiscal year, FBR has so far collected Rs 1,130 billion during six months and 20 days as compared to a collection of Rs 971 billion in the corresponding period of Oiscal year 2012-13. FBR’s year on year growth in revenue collection stood at 16 per cent while it required a growth of 28 percent to achieve its desired target of Rs 2,475 billion on June 30, 2014. To avoid the expected shortfall, FBR Chairman Tariq Bajwa has said, “We are taking stock of the whole situation and directing all Oield formation ofOices to generate demands as excuse of not receiving returns is no more acceptable. The devised strategy would be implemented in all over the country.” He said, “It is a matter of grave concern for FBR that the dutiable imports have dwindled in a major way during the current Oiscal year but we are taking mid-year correcting steps by ensuring creating of demand on received returns and holding audit of withholding taxes.” FBR has been facing substantial revenue shortfall during the current Oiscal year as in the Large Tax-

payer Unit (LTU) Karachi alone, the shortfall is more than Rs 40 billion so far. When FBR Chairman’s attention was drawn towards this massive shortfall in Karachi, he said that the Board changed chief commissioner of the LTU Karachi and recently appointed Rehmatullah Wazir on this slot. The chief commissioner of RTO-1 Karachi was also changed and now Dr Irshad has been appointed with the task to maximise revenue collection. He said almost two-third imports were exempted from taxes on account of various SROs or different agreements while one-third imports fell into the category of dutiable items. This major revenue spinner, he said, grew by two to three per cent during the current Oiscal year which is a matter of grave concern for FBR. FBR Chairman said that the Board received returns from individuals as well as corporate sectors and now LTUs and RTOs were assigned to generate demands by evaluating their genuine income and ensure compliance. “The effective audit of withholding tax is another priority area for the FBR which will be focused upon in weeks ahead to ensure increased revenue collection,” he added. Although, IMF has already scaled down FBR’s target to Rs 2,345 billion for the current Oiscal year but so far the Board has not yet made any effort to reduce its tax collection target at ofOicial level to the Ministry of Finance. In the remaining Oive months and 10 days till June 30, 2014, FBR will have to collect Rs 1,345 billion. In case of slippages in

It is a matter of grave concern for FBR that the dutiable imports have dwindled in a major way

Promotionoftaxcultureneedofthehour:ShahidAsad SIALKOT

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ederal Board of Revenue’s official spokesperson Shahid Hussain Asad has said that it is dire need of the hour to promote 'Tax Culture' in the country to overcome financial issues. In an official statement, he said,“The business community and people in general should pay their due taxes according to their income for strengthening the country economically. If everybody starts paying due taxes according to one’s income and law it will pave the way for getting rid of foreign loans.” He said that it was our moral and national duty that we should pay due taxes for larger national interests as well as to attain economic sustainability. Shahid Asad said that expenditure of 2013-14 was about Rs 3,500 billion whereas the target was below Rs 2,500 billion, adding that an overall loan of over Rs 1,000 billion is needed for running the system of the country. "We can easily get rid of foreign loans if the business community and people pay their taxes regularly," he added. Earlier, Shahid Asad, who is also Member Inland Revenue (Policy), addressed a seminar on "Audit under theTax Laws" organised by PakistanTax Bar Association and SialkotTax Bar Association jointly.

revenue, the government’s Oiscal framework will be torn apart and IMF’s programme i.e. Extended Fund Facility will enter into a danger zone. A Finance Ministry press release quoted Tariq Bajwa as saying that FBR had collected Rs 1,031 billion till December 31, 2013. Besides, it has refunded Rs 56 billion against sales tax compared to Rs 44 billion in the corresponding period last Oiscal year. He stated this in a meeting to review performance of FBR for the period July-December 2013. The meeting was chaired by Minister for Finance Senator Muhammad Ishaq Dar. The Finance Minister also reviewed the progress made by FBR in the compilation of tax directory for parliamentarians and its publication by February 15, 2014. Dar said that though an ambitious revenue target of Rs 2,475 billion was set by the government, it is satisfying to learn that FBR has achieved a growth of 16% in its revenues. This, he said, was made possible because of pro-business policies of the government, improved Oinancial discipline, clearing of circular debt, leading to increased economic activity in the country. Dar said that use of information technology for data collection is the way forward to increase revenue and widen tax base in the country. In this connection FBR ofOicials should coordinate with organisations within the country as well as interact with HM Royal Revenue Service of United Kingdom and Revenue body of Turkey which are success stories in increasing and collection of taxes.

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NATIONAL 03

JANUARY 28 - FEBRUARY 03, 2014

gem exporters slam SRo on export

PESHAWAR: Exporters of precious gems from KPK have shown apprehensions over implementation of SRO760 (1) by the Ministry of Commerce. They have demanded its withdrawal without any delay saying that if the decision was not withdrawn within three days, they would go to court against it. Chairman APCEA Rashid Qadeer Mir said that gemstones’ exporters have been bounded to register with TDAP, by depositing Rs 30,000, while Rs 15,000 will be paid as registration fee for renewal after three years under SRO, released by Ministry of Commerce.

Commerceministerssettoneforthawinties

Rs 12,635,921 recovered from two companies

Pak,IndiaagreetoNDMA,24/7trade NEW DELHI

he Research and Development (R&D) Section of Model Customs Collectorate -MCC Appraisement (East) has recovered an enormous amount of Rs12,635,921 in share of recovery from the importers M/s A to Z company and M/s H A company in the month of December 2013. The sources in MCC-Appraisement (East) informed CustomsToday that the officials in R&D Section created an additional demand of Rs1,555,238 against the M/s A to Z company, which paid zero initial duty against the import of three containers containing unpolished porcelain tiles.The importer had filed the Goods Declaration (GD) KAPE-HC-21176 on 13 September 2013 against the three containers containing unpolished porcelain tiles. Subsequently, the R&D Section found the tax evasion against the said filed GD and recovered an amount of Rs1,555,238 after raising demand of the said amount from the importer. Similarly, the R&D Section of MCCAppraisement (East) recovered an amount of Rs11, 080,683 altogether in share of fine penalty against the ONOs issued individually to M/s A to Z company of Rs7,784,157 and M/s H A importers against the mis-declaration of miscellaneous goods in GDs KAPE-HC-7720 on 31 July, 2013; KAPE-HC-9150 on 5 August, 2013 and KAPE-HC-9142 on the same date in the month of August, while a fine penalty of Rs3,296,526 against the ONO to M/s H A company had also been recovered in the month of December against a GD KAPE-HC7724 on 31 July, 2013.The sources further informed this scribe that the R&D Section also recovered an amount of Rs10, 271,653 in share of mis-declaration from M/s A to Z company in the month of October by raising an additional demand against the paid initial duty of Rs337, 393. —CT Report

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hat is being described as signs of thaw in relations following a 16-month hiatus, arch-rivals India-Pakistan agreed to Oind ways for establishing reciprocal Non-Discriminatory Market Access (NDMA) by February-end. This includes issuing bank licences to allow banks to function in each other’s country. Addressing reporters after a meeting, the Commerce Ministers of both the countries said they had agreed to open Wagah-Attari border for trade at all times of the year. They also agreed to allow containers, which were until now unloaded at the check-post and reloaded on the other side, to be moved right up to Amritsar and Lahore. Both the countries agreed to allow round-the-clock movement of trucks and containers through their main border crossing. The Commerce ministers of the two countries meeting in New Delhi also approved a liberalised visa policy for businessmen to help expand two-way trade, which was barely $2.5 billion in 2012/13 Oiscal year against a potential $10 billion. The joint statement issued after the meeting said that Pakistan and India agree to provide 'NDMA' on reciprocal basis and to relax visa regime. "We have agreed that we will open Wagah-Attari border 24/7 for trade," Anand Sharma, India's trade minister told reporters, referring to the main border crossing in Punjab. The border gates at the moment are open only from dawn to dusk. Pakistan also agreed to provide nondiscriminatory market access to Indian companies. Over the last year there was little movement on trade because of a series of incidents over military control of the line dividing Kashmir between the two countries. Two years ago, the two countries set a goal for taking bilateral trade to $6 billion by 2014, which now seems difOi-

cult to attain. Pakistani Commerce Minister Khurram Dastgir Khan said the country's central bank had proposed its Indian counterpart grant banking licences to three Pakistani banks, a move which would be reciprocated by his side. Commerce ministers of both the countries reafOirmed the commitment of their governments to expeditiously establish normal trading relations and in this context to provide NDMA on a reciprocal basis. The meeting between Commerce and Textile Industry Minister Khurram Dastgir Khan and his Indian counterpart Shri Anand Sharma on the margins of 5th SAARC Business Leaders Conclave was preceded by consultations at the level of the secretaries commerce of the two countries on matters related to economic and trade relations. It is to be noted that Khurram Dastgir visited India from January 16-18 to attend

Both the countries agreed to allow roundthe-clock movement of trucks and containers through their main border crossing

the conclave on the invitation of Anand Sharma. The ministers decided to intensify and accelerate the process of trade normalisation, liberalisation and facilitation and implement on the agreed measures before the end of next month. They noted with satisfaction that arrangements had been implemented by both sides to keep the Wagah-Attari Land Customs Station operational seven days a week. The ministers emphasised on the importance of trade facilitation measures and directed their respective ministries to work out modalities for containerisation of cargo, allowing all tradeable items by land route at Wagah, liberalisation of business visa regime and enhancing operational hours at Wagha and Attari and considering such other measures as deemed necessary by the business communities of the two countries. The third meeting of the Joint Business Forum is scheduled for mid-February in Pakistan.

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NATIONAL

JANUARY 28 - FEBRUARY 03, 2014

MCC Quetta thwarts smuggling attempt

QUETTA: Anti-Smuggling Establishment of Model Customs Collectorate Quetta seized smuggled goods worth Rs 20 million. The authorities received hints about a huge quantity of goods to be smuggled from Afghanistan via Chaman. Reacting to the tip-off, a team of Pakistan Customs staff intercepted two buses, fully loaded with smuggled goods, near Sheela Bagh customs check post. During examination, the officials seized smuggled goods including cloth, cigarettes, blankets, tooth pastes and miscellaneous items worth Rs 20 million.

FBR announces exemptions for govts, diplomats, privileged persons ederal Board of Revenue has announced exemptions for federal and provincial governments, foreign diplomats, diplomatic missions and individuals entitled to privileges under the United Nations (Privileges and Immunities) Act through an SRO 17(I)/2014. Sources said that exemptions are announced on payment of 10 percent withholding tax on functions in hotels/marriage halls and 5 percent tax on fee paid to educational institutions in Pakistan. The provisions of section 236I and 236D shall also not apply to the person who is a non-resident and furnishes copy of passport as an evidence to the educational institution that during previous tax year, his stay in Pakistan was less than 183 days; furnishes a certiﬁcate that he has no Pakistan-based source of income and fee is remitted directly from abroad through normal banking channels to the bank account of the educational institution. —CT Report

to arrest dollar ﬂight, eCC bans gold import for 30 days Sharp increase in duty on import of gold in a neighbouring country had given surge to its smuggling activity, adding that the decision would help curb smuggling activities without aﬀecting the legitimate demand supply phenomenon of gold in the country ISLAMABAD

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o contain the sliding value of rupee and ease mounting pressure on it against American dollar, the Economic Coordination Committee (ECC) decided a temporary ban for 30 days on the import of gold, both under SRO 760 and its commercial imports, under Import Policy Order 2013. The ECC of the Cabinet which met with Federal Finance Minister Ishaq Dar in the chair decided the temporary ban with the aim to stop dollar Olight and strengthen dwindling exchange rate. The executive body contemplated the draining out of dollar on account of gold import and expressed that the government was striving hard to ensure ample supplies of the green back to keep exchange rate stable.

Addressing the meeting, the Finance Minister revealed that sharp increase in duty on import of gold in a neighbouring country had given surge to its smuggling activity, adding that the decision would help curb smuggling activities without affecting the legitimate demand supply phenomenon of gold in the country. He pointed out that exports, however, would continue without any restriction. It is to be noted that Foreign Exchange Companies had taken up the issue of gold smuggling and consequent pressure on open forex market with the Oinance minister in a meeting in Karachi and a follow up meeting in Islamabad. Subsequently matter was placed before the ECC for its consideration. It is worth mentioning here that the government had imposed a ban on gold import on July 30, 2013 for one month and introduced a new import scheme in its place in August 2013. Under the new entrustment scheme, the quantity of gold importable by a single party will be capped at 25kg on a re-

volving basis while the beneOiciary will be obligated to export the imported gold in the form of value-added jewellery within 120 days, instead of previously permissible period of 180 days. Under the revised scheme, it will be mandatory for the party to have contract notarised from the foreign county’s legal authorities and duly attested by the relevant Pakistani missions abroad. Under the previous scheme, foreign buyers entrusted and sent gold to the Pakistani exporter on the basis of a plain paper contract. Federal Minister for National Food Security and Research Sikandar Bosan, Federal Minister for Industries and Production Ghulam Murtaza Jatoi, Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi, Federal Minister for Commerce Khurram Dastagir, Minister of State for Information Technology Ms. Anusha Rehman, Chairman Privatization Commission Zubair Umar, Chairman Board of Investment Muftah Ismail and senior ofOicials concerned attended the meeting.

Ban for 30 days on the import of gold has been imposed both under SRo 760 and Import policy order 2013

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SPECIALREPORT

JANUARY 28 - FEBRUARY 03, 2014

IShAQ dAR FINANCE MINISTER ach year on 26th January, Customs Administrations around the globe celebrate the international customs day.The day is celebrated under the aegis of world customs organization (WCO) which has 117 members worldwide. The WCO secretariat Brussels has announced this year’s theme as‘Communication; sharing information for better coordination’. In its eﬀorts to help custom oﬃcers understand the changed environment in which customs now operates, Federal Board of Revenue has made remarkable achievements. Establishment of new customs stations on country’s borders, reorganization and upgradation of facilities entails the commitment of Pakistan customs and FBR with this years’ theme of International Customs Day. Today customs is facing new chal-

lenges, which have increased their responsibilities to ensure smooth flow of trade by applying necessary controls on one the hand, with guaranteeing protection, health and safety of the business community on the other. The dual role of Pakistan Customs demands that they must remain vigilant and vibrant and must endeavor to enhance cooperation with other customs administrations so as to make the bestpossibleuseofalltheresourcesandinstruments available by demonstrating a higher level of integrity from decision making to law enforcement, being in the front line in the fight against trafficking of drugs and chemical precursors, fiscal frauds and smuggling of other contrabands. Pakistan Customs is one of very few organizations who pioneered in designing and automating clearance and audit sys-

kAMRAn MIChAel MINISTER PORT AND SHIPPING tem. It is a known fact that increase in trade volumes cannot be handled without state-of-the-art clearance system and the department’s efforts in this regard must be appreciated. Introduction and upgradation of automated environment coupled with exchange of information is remarkable achievement providing benefit to our stakeholders, i.e. the government, trade and industry as well as the global community. Even a considerable progress has been made, still a great deal remains to be achieved in the field of trade and facilitation. I wish that Pakistan customs overcomes all the challenges of revenue generation, combating smuggling and halting drug trafficking. I congratulate all customs officers and officials on this auspicious customs day.l

RIAZ KHAN

tARIQ BAJwA

DG I&I

CHAIRMAN FBR

OFFICIAL SPOKESMAN OF FBR

he WCO is internationally acknowledged as the global centre of customs expertise and plays a leading role in the discussion, development, promotion and implementation of modern customs systems and procedures. It is responsive to the needs of its members, and its strategic environment, its instruments and best-practice approaches are recognized as the basis for sound customs administration throughout the world. TheWCO’s primary objective is to enhance the eﬃciency and eﬀectiveness of membercustomsadministrations,thereby assisting them to contribute successfully to national development goals, particularly revenue collection, national security, trade facilitation, community protection, and collection of trade statistics. It a fact that information sharing is the key for betterment of work especially in the case of exploration and investigation.l

akistan Customs, like all other CustomsAdministrationsoftheworld,is celebrating International Customs day on 26th January, 2014. I extend my warmfelicitationstoallofficersandofficials of the department on this special day.The concepts of Customs operations are developed in accordance with the latest economic developments taking place around the world. Role of Customs is not restricted to collecting duty and taxes on goods and guarding sea and land frontiers, but also involves trade facilitation and economic development. There is a need to cope with the changing developments in international trade; which warrants developing a wellplanned strategy beginning with the development of a skilled human resource and modern cargo clearance system, besides a robust system of exchange of information, which is the most important element of establishing an effective enforcement and deterrence against crossborder movement of illegal goods and persons. The theme chosen for this year is “Communication: sharing information for better cooperation”, which is aimed at promoting connectivity between persons and institutions. The rapid pace of globalization in recent years has reshaped international trade scenario and demands a constant

s Pakistan Customs is preparing to celebratethe62ndanniversaryofthe World Customs Organization along with other members, it is only beﬁtting that we use this opportunity to acknowledge the heritage that the founders of the Customs Co-operation Council bestowed onitsmembers,namelytheimportanceof cooperation, particularly the value of inter-connectednessandinformationsharing for the security and safety of global supply chain. This year’s theme of “Communication: sharing information for better cooperation” truly reﬂects the heritage of today’s customs in the 21st Century strategic vision and Pakistan Customs is striving to promote this concept of cooperation and connectivitythroughcommunication.Communicationencapsulatesstrengthenedcoordination,cooperationandcommunication between Customs administrations, with other government agencies and institutions and with the private sector at national,regionalandinternationallevels.l

ShAhId ASAd

communication, not only amongst jurisdictions, but also with the business community. The connectivity approach has prompted customs organizations around the globe to increase collaboration; and Pakistan is committed to this. Tariﬀ rationalization and a facilitative approach can prove a catalyst to kick start the stagnant economy. Our endeavor in Pakistan Customs is to achieve signiﬁcant growth in both these critical areas. This would be Customs contribution to the economy. I wish that the department will continue to follow the path of modernization and trade facilitation and keeps on playing its role in the progress of the country. l

he WCO represents 179 customs administrations across the globe that collectively process approximately 98% of world trade. As the global centre of Customs expertise, theWCO is the only international organization with competence in Customs matters and can rightly call itself the voice of the international Customs community. I am glad that Pakistan has always played a positive role in this regard and always safeguarded the national and internationalinterests.My best wishes and prayers for those customs oﬃcials who played a front role in this regard! l

khAwAR FARId MAnekA DGTRANSITTRADE n the occasion of International Customs Day, the government and Pakistan Customs should strive to follow all practices, functions and procedures implemented at international level. We should raise the bar and stand with integrity and transparency in order to get optimum outcome.l

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SPECIALREPORT 07

JANUARY 28 - FEBRUARY 03, 2014

RIFFAt ShAheen

nISAR MuhAMMAd

ShAhId JAtoI

MEMBER FATE

MEMBER CUSTOMS

MEMBER ADMIN

orld Customs community is celebrating International Customs Day on 26th January, 2014. Customs play a pivotal role in economic development through eﬃcient targeted controls and the facilitation of legitimate trade. In the prevailing scenario, securing global trade requires international cooperation and coordination amongst governments and trade bodies, as well as with other members of WCO. It compels in sharing and improving knowledge within the customs community and this year’s theme of“Communication: sharing information for better cooperation” underscores the importance of collaboration and communication. In addition to the traditional tasks, Customs has new responsibilities which cannot be addressed without necessary skill set, knowledge and connectivity. It is essential to broaden the horizons, enhance the competence and improve the eﬃciency of Customs administration through better performance, transparency and development of new techniques and systems. I congratulate Pakistan Customs on the introduction and successful country-wide roll-out of indigenously developed new software WEBOC (Web Based One Customs) for automated clearance. The department is focused on the path of modernization and has implemented state of the art systems employing sophisticated equipment at border stations, airports and seaports in collaboration with international Development Partners like UNODC, World Bank, Asian Development Bank, USAID, JICA, DFID, GIZ, IFC, etc.

very year this day is celebrated on 26th of January.This year WCO dedicated customs day to the theme ‘Communication; sharing information for better cooperation.’WCO members have the opportunity to enhance the communication and information sharing and practices and mechanisms that they have implemented, within their administrations, with ministries and other government agencies, with the trade community and with the general public. Pakistan Customs being an active and responsible member of WCO is fully committed to the objectives and aims chalked out by the international community to make the world a peaceful place through eﬀective security and economic measures. The nation celebrates the day along with the world customs community with the strong resolve that Pakistan customs is fully prepared and

committed to play its role in nationbuilding through revenue collection, trade facilitation and safeguarding economic integrity of the nation through eﬀective security measures within the country and its borders. The importance of customs operations has increased tremendously in today’s globalised world as growing integration of trade demands seamless and secure procedures for customs clearance. Thus the need for acquiring and applying modern knowledge and skills to bring customs procedures and systems at par with best practices in the world has increased manifold.l

M.yAhyA

IMRAn AhMed

akistan Customs, being member of the World Customs Organisation and the world’s Customs community of 176World Customs Organizations (INCO), is participating in the world-wide International Customs Day on 26th January, 2014 being celebrated with the slogan of “Communication: sharing information for better cooperation”. In the present day world as a global village, Communication and information sharing has become synonymous with team-work and eﬃciency at every level. No organisation can aspire to survive and prosper in today’s world while living in isolation. Pakistan Customs is no exception to this rule. More than ever, today there is a need to streamline and synchronise our information sharing mechanism to be not only at par with the international customs best practices but to improve further.l

IMtIAZ AhMed COLLECTOR

I take the opportunity to state that, in an era of declining resources and increasing volumes of trade and travel effective risk management is a necessity for Customs. It is almost impossible for Customs to physically check every consignment and passenger. Risk management is something that needs to be implemented across the organization, which requires complete information about all incoming and outgoing cargo. An efficient and robust “Risk Management System” would certainly enable Customs to better achieve the balance between facilitation and control by focusing & targeting only “High risk goods and passengers”. I also would like to congratulate all officers and officials of Pakistan Customs on this special day of global importance and hope that the department will continue its commitment in achieving revenue targets, facilitating trade and passenger traffic, besides demonstrating efficiency to counter trafficking of drugs and smuggling of contrabands. We have to improvise in all fields to contribute positively in the domestic economic growth and consolidation of international trade relations in consonance with theWCO’s 2014 slogan of connectivity.l

dR MuhAMMAd ZuBAIR CHIEF INTERNATIONAL CUSTOMS While wishing all my colleagues a very happy Customs Day I would like to take this opportunity to reinforce the pivotal role of information sharing and cooperation in customs organization to achieve the goals of facilitation in international trade on one hand and curbing cross-border organized crimes on the other. This year’s theme of communication sharing information for better cooperation entails the very spirit of customs roles and responsibilities which are largely reliant on extensive exchange of date and information.l

he Customs fraternity around the globe is celebrating International Customs Day to promote communication under the slogan“Communication: sharing information for better practices”. The purpose would be to enhance the communication and information sharing practices among the concerned government departments / agencies, the trade community and public. The role of Customs department has been evolved in the last decade from mere revenue collection to front line agency for safety of global supply chain and combating transnational crimes like money laundering, terrorism, drugs & human

traﬃcking, etc. This necessitates cooperation of various government department/agencies, trade community including public to exchange information with Customs Department.l

CHIEF COLLECTOR

he InternationalCustomsDay is celebrated each year on 26th January to commemorate the founding of the World Customs Organization (WCO) in 1953. The celebration of this day emphasizesthesigniﬁcanceattachedtothestatus which Pakistan Customs occupies within the community of International Customs. I sincerely congratulate Pakistan Customs on the eve of International Customs Day. Pakistan being part of international community is fully aware of its role and responsibilities.Customsbeinganinteractive and responsible organisation has never lagged behind in fulﬁlling its national as well as international commitments. Pakistan Customs being an active member of the International Customs community interacts with Customs administrations of the other countries under the aegis of global Customs.This year’s theme ofWCO, “communication: sharing information for better cooperation” will enhance this interaction to the higher grounds.l

ADDITIONAL DIRECTOR I&I

he theme given by World Customs Organization on International Customs Day is communication: sharing information for better cooperation. Pakistan Customs has an open system of information sharing with other government agencies, trade bodies and general public through web portals and frequent contact meetings. Online information about uncleared cargo, relevant rules and status of consignments is readily available.l

FARRukh SAJJAd

ADC-IREFORMS&AUTOMATION

akistan Customs is one of the responsive departments among all other government departments.We have sophisticated system, although empowerment and enforcement are needed accordingly.l

— Exlusive Customs Today photos

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08 EDITORIAL

JANUARY 28 - FEBRUARY 03, 2014

Founder & Chairman Zulﬁqar Ali 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

enhancing eﬀectiveness

nternational Customs Day (ICD) is celebrated around the globe on January 26 every year to highlight and recognise the role of customs officials in maintaining border security of each independent state. International Customs Day is an important landmark as this day provides Customs Administration an opportunity to reaffirmWCO’s mission of enhancing its effectiveness and efficiency.WCO has dedicated 2014 to promoting communication under the slogan “Communication: sharing information for better cooperation.”WCO members will have the opportunity to enhance communication and information sharing practices and mechanisms which they have implemented, within their administration, with ministries and other government agencies, with the trade community and with the general public. By celebrating this day, Pakistan can learn many lessons from experiences of other member states ofWorld Customs Organization (WCO) as to how they curbed the menace of smuggling, anti-dumping and other crucial issues by enhancing cooperation with each others.There is also need to remember those who sacrificed their precious lives for the purpose of protecting revenues of the country and spending most part of their life at odd places such as sea, ports and customs check-posts located in hilly and desert regions. In order to analyze the historical prospective of International Customs Day, it commemorates the day in 1953 when the inaugural session of the Customs Cooperation Council (CCC) was held in Brussels, Belgium. Seventeen European countries attended this session. In 1994 the CCC was renamed asWorld Customs Organization (WCO) and now customs organizations from 179 countries areWCO members. Keeping in view geographical location of Pakistan, transit trade is very important aspect for the country and international cooperation can play an important role to ensure its full implementation.The slogan ofWorld Customs Organisation (WCO) is quite important when it comes to Pakistan as under valuation and smuggling continue to plague the country and hamper its economy. Pakistan has been, persistently, requesting to many countries, especially its neighbours, to exchange goods declaration (GDs) in detail so that under-valuation at time of assessment and subsequent imposition of duties could be averted. More than 40 percent of the total revenue is collected at import stage in Pakistan which necessitates the need for focus upon improving efficiency at border clearing points to augment tax generating efforts.The use of technology and adoption of uniform system at all points of prime important is required urgently.There is also a need for fixing the lingering problems ofWeb Based One Customs (WeBOC) and to replicate it all over the country. Although, Pakistani Customs has planned, since long, the establishment of 1,000-strong Border Security Force (BSF) to be deployed at crucial points to curb cross-border trafficking, yet the idea could not be materialised so far, primarily, due to a lack of requisite finance and other vagaries. Under such circumstances, the government should accept demands of the Pakistan Customs and facilitate the authorities concerned by providing them with the wherewithal and other resources in their bids for curbing under-valuation of goods as well as smuggling.

IMF may ask FBR to impose additional taxes of Rs50b ISLAMABAD

SM hAIdeR

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nternational Monetary Fund (IMF) might ask Pakistan to impose additional taxes of Rs 50 billion at least for achieving the desired tax collection target of Rs 2,475 billion for the current Oiscal year. Although, IMF had revised downward the tax collection target from Rs 2,475 billion to Rs 2,345 billion in its own assessment and so far FBR is on track if analyzed on the basis of target envisaged by IMF high-ups. However, in the second half from January to June 2014, FBR will have to gear up its efforts even to achieve the target of Rs 2345 billion and in case it strives for Rs 2,475 billion then additional taxes will have to be imposed in the months ahead to avoid massive slippage. Pakistan and IMF mission is scheduled to hold second review talks under $ 6.67 billion bailout package i.e. Extended Fund Facility from next week and the most im-

portant agenda of upcoming talks is performance of FBR in terms of revenue collection in Oirst half July to December 2013. FBR had collected Rs 1020 billion in first six months of the current fiscal year against the desired target of Rs 1100 billion, registering a shortfall of Rs 80 billion. For bridging this shortfall, IMF might propose Rs 50 billion additional taxes while remaining Rs 30 billion will be recovered through various administrative measures. So far FBR has collected Rs 1140 billion till January 23, 2014 so the tax machinery will have to collect Rs 1335 billion in remaining Oive months and seven days to display the desired tax target of Rs 2,475 billion on June 30 this year. IMF mission is also expected to raise questions about tax amnesty scheme announced by the Prime Minister. IMF high-ups argued that it strongly supports Pakistani government’s objective of increasing the number of taxpayers in the system and the amount collected. However, the IMF statement reads, “We have some concerns

IMF mission is also expected to raise questions about tax amnesty scheme announced by the prime Minister. IMF high-ups argued that it strongly supports pakistani government’s objective of increasing the number of taxpayers in the system and the amount collected

about the tax incentive scheme announced.” Among other things, IMF worries as it grants immunity from audits in exchange for relatively modest tax payments, undermining tax enforcement. “During the upcoming review mission, we will work with the authorities to clarify our understanding of the scheme and will seek modiOications as needed to address our concerns,” it added. However, the sources in FBR said that they did not make any formal request to Finance Ministry for revising downward its annual tax collection target of Rs 2,475 billion. “We are sticking to our desired target which we still believe is achievable by ensuring effective enforcement,” they added. They also said that FBR’s performance was up to the mark keeping in view law and order situation prevailing in the country as well as macroeconomic situation. If the GDP growth is hovering around 3 to 5 per cent and inOlation is in the range of 9 to 10 per cent then FBR is collecting taxes of 16 to 17 per cent compared to the period of the last Oiscal year.

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JANUARY 28 - FEBRUARY 03, 2014

dubai customs conﬁscated 2m products in 2013

DUBAI: More than two million banned products worth 45 million UAE Dirhams (DH) were confiscated by Dubai Customs in 2013. A total of 160 tonnes of illegal goods were seized at Jebel Ali Customs Centres. The confiscated goods included 506,000 pills worth DH 5 million and 130,000 items of endangered red sandalwood, which is banned under the Convention on International Trade in Endangered Species, worth Dh 5.2 million. Dubai Customs also seized more than 31,000 stolen items and goods not matching their description in the manifest. This haul was valued at Dh 2.7m.

dar tells dFId delegation economy on track

odel Customs Collectorate and federal capital’s police are reportedly in a dispute over the ownership of highly expensive smuggled vehicles worth more than Rs 200 million while the vehicles are being parked under open sky which can render them worthless. Senior oﬃcials of Pakistan Customs have been trying their utmost for the past several months to obtain possession of 27 smuggled luxurious motor vehicles including Land Cruisers, Prado, Lexus,Toyota and Honda. As per the judgment of Supreme Court of Pakistan and the Customs Act, the seized smuggled motor vehicles can be disposed of by customs department through open and transparent auction. The auction of these 27 luxurious motor vehicles parked now in Sabzi Mandi and Margalla Police Stations in Islamabad may bring more than Rs 200 million to the national exchequer. If the vehicles remained parked in the open sky, they will surely become junk after few months. It is learnt that Federal Board of Revenue ChairmanTariq Bajwa is likely to bring this matter into notice of the Federal Interior Secretary Shahid Khan. —CT Report

notice to customs officials on plea against Indian films he Lahore High Court issued a notice to customs officials to submit a reply regarding a petition challenging illegal import of Indian films. Justice Syed Mansoor Ali Shah passed the order on a petition filed by Advocate Mian Tariq. Earlier, the petitioner counsel arguing before the court said that Indian films were included in the negative list of import policy. Despite that, Indian films were being imported through third country illegally, he added. He said that customs officials received duty on the films instead of confiscating them. He prayed the court for directions to stop import of Indian films. —CT Report

Customs values of contact lenses issued he Directorate General of Customs Valuation has determined the customs values of contact lenses through a Valuation Ruling No.633 under Section 25-A of the Customs Act, 1969. According to theVR No.633, the Customs values of Contact Lenses from China Origin having PCT heading 9001.3000 and proposed PCT forWeBOC is 9001.3000.1000 has fixed at US$3.5per pair; the Customs values of Contact Lenses from Korea Origin having PCT heading 9001.3000 and proposed PCT forWeBOC is 9001.3000.1100 has fixed at US$6.5per pair and Customs values of Contact Lenses from Indonesia, Singapore, UAE, USA and UK having PCT heading 9001.3000 and proposed PCT forWeBOC is 9001.3000.1200 has fixed at US$8.00per pair. —CT Report

Ministerreviewspaceofworkon

tax directory, FBR performance ISLAMABAD

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inance Minister Ishaq Dar underlined the need for effective use of information technology for data collection, terming it the way forward to increase revenue and widen tax net in the country. Dar asked the FBR ofOicials to enhance liaison and coordination with local organisations as well as interact with Royal Revenue Service of the UK and Turkey which had set glaring examples of increasing collection of taxes. The Oinance minister shared the thoughts while chairing a meeting held to review pace of work on the compilation of a tax directory to be consisted of tax details of parliamentarians and arrangements for its publication by Feb 15. The minister was apprised that as part of the amnesty scheme, the FBR was facilitating parliamentarians in acquisition of National Tax Numbers (NTNs) to help them Oile their tax returns and become compliant taxpayers. It is to be recalled that during policy statement made in the last session of the Senate, the minister asked the tax ofOicials to issue NTNs to all those parliamentarians having no tax numbers. The minister was informed that the FBR would ensure that all the parliamentarians got their NTNs and declare their incomes, especially salary. It is believed that at least 10 to 15 per cent parliamentarians either do not have NTNs or have not yet Oiled returns. Some of the parliamentarians belong to tax-free areas, like Fata, Pata and some areas in Balochistan where income tax act has not been extended. Last year, the government set up a facilitation desk for parliamentarians but some

of the parliamentarians did not avail the facility. Though the FBR faced a revenue shortfall of Rs69 billion in the Oirst half of the current Oiscal year, Dar satisOied with the FBR performance in achieving 16pc growth against the projected growth target of 27pc during the corresponding period. Speaking on the occasion, the minister said the government had set an ambitious revenue target of Rs2,475 billion for the current Oiscal year and emphasised the FBR ofOicials to focus their energies on the efforts to meet the target. BrieOing the minister, FBR Chairman Tariq Bajwa said that the FBR had collected Rs1,031 billion till Dec 31, 2013. He informed that the FBR had refunded Rs56 billion against sales tax compared to Rs44bn in the corresponding period last year. The Oinance minister also chaired a highpowered committee set up to streamline and rationalise statutory regulatory orders (SROs). He directed the FBR high-ups to make strenuous efforts to reach the desired decision about SROs at earliest. Meanwhile, Finance Minister Mohammad Ishaq Dar said that Oingers of the Oirst half of the current Oiscal year indicated that the economy was on track and moving in the right direction. Talking to members of a delegation of the Department for International Development (DFID), he said that revenue collection had shown an increase of 16 percent, exports 5 percent and remittances rose by 9 percent, adding that Pakistan Bureau of Statistics had reported 5 percent growth in the economy in the Oirst

quarter while the in the Karachi Stock Exchange index had crossed 27,000 point mark. The DFID delegation comprised of UK High Commissioner Phlip Barton, Mrs Pauline Haupres, Richard Montgomery a n d

FBR to make legislators’ tax details public by Feb 15, says Ishaq dar

Moazzam Malik. Ishaq Dar informed the delegation that the government had inherited a fragile position and entered into an IMF Programme to stabilize it. He said that Pakistan still suffered from negative inOlows despite an IMF plan and reiterated the government resolve to increase foreign exchange reserves to $16 billion by the end of the present year. On the occasion, Moazzam Malik appreciated the government economic policies said that the UK was looking at ways to provide further assistance to Pakistan. DFID head Richard Montgomery appreciated the decision of the government to publish tax directory for parliamentarians. During the meeting, the Income Support Programme also came under discussion. It was assured that the Finance Ministry would make timely releases so that the beneOiciaries of the programme get the money well in time.

hyderabaddryporttohaveallfacilities HYDERABAD

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hief Collector Customs (South) Muhammad Yahya has said that the Customs Department fully desired to run Hyderabad Dry Port with full capacity. However, there is a need to ensure availability of required facilities. He said this while addressing the members of Hyderabad Chamber of Commerce and Industry. He said that trade and customs are two wheels of a same vehicle. Therefore, the provision of required facilities available at other dry ports of the country are needed at Hyderabad Dry Port so that the importers and exporters could not feel any inconvenience while dealing with their businesses at the port. On the occasion, he directed the Collector of Hyderabad to resolve the issue of National Logistics

Cell so that the business community of Hyderabad could carry out business activities smoothly. He also asked the ofOicers of Anti-Smuggling Intelligence to address the complaints of HCCI in respect of unusual checking of the consignments. Earlier, HCCI President Gohar Ullah in his welcome address highlighted the issues being faced by the business community of Hyderabad. The Chairman of HCCI sub-committee on customs Abdul Qayoum Nusrat also highlighted the problems about the taxpayers of the city. Collector Muhamamd Ibrahim Vighio, Additional Collector Riaz Memon, Deputy Collector Muhammad Saleem, Senior Vice President of HCCI Turab Ali Khoja, Vice President of HCCI Nawab Ahmed Khanzada, Ziauddin, Maqsood Ahmed Khan, Afroz Ali, ZulOiqar Ali Chohan, and Abdul Sattar Khan were also present on the occasion.

Youswanilikelytotake chargeasPDDirectorate Reforms&Automation ajid Youswani, Additional Collector-I of MCC Port Muhammad Bin Qasim is likely to take charge as Project Director (PD) Directorate of Reforms and Automation. Reliable sources informed Customs Today that after the transfer and posting of Tanveer Ahmad as Collector MCC-Gwadar, FBR is likely to assign charge of PD Directorate of Reforms and Automation to Majid Youswani. The sources further said that FBR is likely to issue notiﬁcation in this regard next week. It is pertinent to mention here that Syed Tanveer Ahmad is disbursing his duties as Collector MCC-Gwadar while he has been given additional charge of Project Director, Directorate of Reforms and Automation as well.

— Exlusive Customs Today photo

Smuggled vehicles: Dispute may render loss to exchequer

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JANUARY 28 - FEBRUARY 03, 2014

pakistan third largest dates exporter

ISLAMABAD: Pakistan has become the third largest dates exporting country in the world and with proper attention and appropriate interventions this sector can flourish manifold. The date sector offers substantial opportunities for export, income and employment generation in addition to economic growth of the country, an official of Ministry of Commerce and Textile has said. The annual production of dates in Pakistan is estimated at around 535,000 tonnes of which only 86,000 tonnes are exported and the rest are either consumed locally or perish.

Minimal containers’scanning at terminals despite directives he three containers terminals in Karachi including Pakistan International ContainersTerminal (PICT), Karachi International ContainersTerminal (KICT) and Qasim International Containers Terminal (QICT) are reportedly unable to ensure 100 percent scanning of containers despite having directives from Pakistan Customs, it was learnt. According to sources, after discerning the possibilities of the clearance of lethal cargos (arms and ammunition) from ports in the absence of proper containers' scanning, Pakistan Customs had directed all three terminals not to release a single container for dry-ports across the country without scanning. However, terminal sources said that the decision to carry out 100 percent containers' scanning before the release of consignments for dryports was taken without taking the terminal operators on board causing hardships for them.They said that scanners installed at all the terminals combined had maximum capacity to examine 100 containers in a day and 3,000 containers in a month. However, the accumulated volume of both (imports and exports) containers was around 15,000 containers per month. They said, "We have maintained 100 percent scanning only for Afghan Transit Trade while scanning the rest of the containers is beyond our capacity." They said that Pakistan Customs should have taken the terminal operators on board before issuing such directives. "The decision cannot be implemented due to practical impediments," the sources added. —CT Report

Break-bulk cargo module for Att to be completed by month end he team of Directorate of Reforms and Automation will complete the‘break-bulk cargo’module for AfghanTransitTrade (ATT) pilot project by the end of current month, it has been learnt. Sources privy to the development told CustomsToday that work on break-bulk cargo module was almost completed and it would be inducted into the ATT pilot project by the end of January. They informed that a meeting, held with Reforms and Automation Project DirectorTanveer Ahmad in the chair, had decided to make the ATT pilot project operational in the next month.They also pointed out that paucity of funds was one of the main impediments in up-gradation of modules inWeBOC as the FBR had established a new Directorate with the name of Directorate of Reforms and Automation in place ofWeBOC but did not allocate ﬁnance to set up group oﬃces in the Directorate at the 11th Floor of Customs House. —CT Report

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

2,000 vehicles stuck due to confusion over SRo KARACHI

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round 2,000 imported vehicles are denied clearance by Pakistan Customs due to technicality of SRO issued by the Commerce Ministry. The vehicles, manufactured in 2009, were shipped in September 2013 and imported under personal baggage scheme. They are held at the port on the grounds that they have exceeded the age limit of three years. All Pakistan Motor Dealers Association (APMDA) Chairman HM Shahzad said that earlier the authorities cleared 2009 model cars against the surcharge. He said that these cars have been cleared throughout 2013 but suddenly the customs has stopped clearing since November 2013 and given the reason that they are interpreting the statutory regulatory order wrong and as per the new interpretation they could not clear cars unless the commerce ministry issues a new SRO to clear the confusion. Importers claimed that they had invested over Oive billion rupees on around 2,000 cars and it is estimated that the total demurrage would be around Rs100 million. Importers are already suffering from the reduction in the age limit from Oive to three years. In 2012, over all Rs 35 billion were collected through car imports, which decreased to Rs10 billion in 2013 due to restrictions. Importers said that uncertain government policies were hurting not only the foreign investment but also the local investors in overseas were also avoiding investing due to the inconsistency of the policies.

On the other hand, Pakistan Automobile Manufacturers Assemblers Dealers Association (PAMADA) has appreciated the customs for curbing illegal import of used cars. “We appreciate the efforts of the customs department, which did not let the used car importers violate rules. It is very encouraging that the customs has stopped the clearance of used imported vehicles which are above the limit allowed by the government for used cars,” said Iqbal Shah, president of PAMADA. He further added that the local auto industry had time and again requested the government to nab used car importers as they were damaging the national economy and local auto industry by importing used

against those importers as to why they have violated the law consciously and should make an example out of them so that no one else should violate law in future, he said. If customs allows the clearance this time as well, it will set a very wrong precedence and in future everyone will try to force customs to clear things, which are prohibited, citing precedence. “Import of used cars is also inOlicting a huge damage to both the local auto industry and the economy on different accounts. Therefore, we reiterate our support to this initiative of customs to have a strong check on the irregularities of used car importers,” he added. PAMADA alleged that “according to the estimates, the gov-

Customs should take strict action against those importers as to why they have violated the law consciously and should make an example out of them cars through twisting schemes of personal baggage, gift and transfer of residence. He alleged that used car importers were again trying to blackmail customs by importing over three-year old vehicles, which were not allowed since 15 Dec, 2012. Last year, customs allowed the clearance of over-aged vehicles against the payment of a small penalty to accommodate those vehicles, which were shipped prior to announcement limiting the age back to three years. So, now unscrupulous traders are trying to deceive customs again by forcing them to clear-over aged vehicles, citing last year examples, Shah said. Customs should take strict action

ernment has lost Rs16.5 billion due to import of used cars in the year 2012 alone. ‘SRO 577 valuation needs revision as the values Oixed by customs are over 200 percent lower than the normal import duty causing losses of billions of rupees annually,” said PAMADA president. Rubbishing the claims of used cars importers about contribution to national economy, Shah said used cars contribute almost 50 percent less than a similar new car made in Pakistan in terms of taxes and duties, while their contribution in terms of employment is negligible as opposed to the local auto and allied industries, which employ around 1.5 million people.

Increasing pak-India trade need of the hour To

The Prime Minister, Nawaz Sharif, I would like to draw your attention towards the low volume of trade between India and Pakistan. The promotion of trade between the two countries is the only way to achieve the common goal of progress and prosperity in the region. The two neighbouring countries should not mix trade with politics and business community should be allowed to carry on trade without hurdles. If we have strong trade relations the political relations will get better automatically. The potential gains from increased economic integration between India and Pakistan are large whereas mutual trade between the two countries is unnaturally

small. Further efforts to facilitate and increase trade can become an effective tool to promote relations. Pakistan’s major exports to India include vegetables, fruits & nuts, sugar confectionery, mineral fuels, salt etc., but these exports form a very insigniOicant proportion of India’s imports of these commodities. A big chunk of these commodities is imported by India from countries other than Pakistan. If trade between Pakistan and India is liberalized the exports of these commodities to India can take a quantum jump. Similarly, there is a great potential for export of Oish, resins, animal & vegetable fats, beverages, spirits, vinegar, leather & leather goods, carpets, pharmaceutical products and tobacco. Similarly, Pakistan can import cotton seed, meat, dairy products, vegetables, fruits, tea, cere-

plastics, rubber and rubber products, iron & steel, machinery, vehicles, raw-materials and semifinished products etc. Informal trade, via third countries (such as the United Arab Emirates, specifically Dubai), is estimated at some $2 billion to $3 billion per year, and this trade could obviously be undertaken bilaterally at significantly lower cost. We, the business community, are committed to have a serious, sustainable and constructive engagement with India. I request you to please do the needful in order to generate a lot of trade activity which is need of the hour to unlock the tremendous trade and business potential offered by this region. als, organic chemicals, pharmaceutical products, tanning, dyeing extracts, chemical products,

Yours truly, Sohail Lashari President, LCCI

www.customstoday.com JANUARY 28 - FEBRUARY 03, 2014

Shaky St collection prompts FBR to probe into tea sector

ISLAMABAD: The poor growth in the collection of Sale Tax on tea in 2013-14, prompted FBR to undertake a probe to ferret out facts. The step has been taken in view of the withdrawal of concessionary rate of 5 percent sales tax on the commodity and imposition of standard rate of 17 percent sales tax on tea. The FBR notified lower rate of 5 percent sales tax on import and supply of black tea through SRO 608(I)/2012 on June 1, 2012. The sales tax was reduced on tea from 16 to 5 percent as a measure to check its smuggling.

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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