Islamabad: The Federal Board of Revenue (FBR) has decided to sign a Memorandum of Understanding (MoU) with Chinese authorities in a bid to control misdeclarations of the value of goods at the country’s ports, according to a news source. The officials concerned plan to curb the frequent instances of massive revenue losses, as well as to protect foreign investments.
The taxation authority has categorised the misdeclarations into three types: weight, description (Pakistan Customs Tariff heading), or value of goods. Businesses or individuals engaged in such unlawful practices are able to avail additional exemptions originally not meant for them.
China has taken steps to improve its mechanism for controlling annual misdeclaration figures which had previously reached approximately USD 8 billion; and according to the Pakistani officials, Islamabad wants to benefit from the Chinese experience on this front. Under the MoU prepared by China’s State Administration of Taxes, the tax authorities of both countries will share data concerning misdeclarations.
A recent analysis of the data compiled by the Pakistan Customs’ One Customs Web Based (WeBOC) system revealed that 62 % of the total goods declared in the country carried variations in their declared and assessed values. The federal government plans to introduce measures to control fraud and corruption within the customs department. Following an internal audit of the department, it was disclosed that most of the misdeclarations were quoted on the value of imported goods from China.
According to FBR Chairman Shabbar Zaidi, China will provide information pertaining to its exports to Pakistan. And a direct communication channel between both the governments will reduce future instances of misdeclarations. Moreover, he said that several customs officers were engaged in corrupt practices. As a regulatory measure, the taxation authority would launch an automatic system soon.
