Electronic forms expected to cut imports bill by $15 billion

KARACHI: The condition on importers of electronically filing import details is likely to bring down the import bills by $10 to 15 billion in addition to curtail at least three-billion dollars worth of under-invoicing, experts said on Friday.

They said the electronic import form (EIF), a joint initiative of Pakistan Customs and the State Bank of Pakistan (SBP) binding importers to file online import form (I-Form) through the online tax system, Web-Based One Customs, will promote legitimate transfer of foreign exchange for import payments.

EIF was scheduled to officially launch from September 1.  In 2015, a similar electronic form for export was also launched to ensure the inflows of genuine transfers.

“The exports also declined after the Form-E launch,” said Hanif Ajari, ex-vice president at the Institute of Cost and Management Accountants of Pakistan. “Actually, all the fake exports were stopped due to the initiative.”

Therefore, Ajari said the imports will also witness a significant decline, following the implementation of I-Form. The decline would be between $10 and $15 billion.

The SBP, in a recent report, said some importers were involved in a multiple transfers of foreign currency against a single letter of credit.

“The central bank is currently examining such cases under money laundering and foreign exchange laws,” said a source.

The country’s trade deficit widened 8.14 percent during the fiscal year of 2015/16. Exports fell 12 percent to $20.8 billion during the year and the imports dropped 2.32 percent to $44.76 billion.

Pakistan Customs introduced the I-Form as pilot from August 15, enabling importers to file EIF request to bank for approval. In the second phase, the new system will be deployed by September 1, which would make the attachment of EIF with goods declaration as well as other components of EIF modules mandatory. The modules include bank debit advise and settlement, said a notification issued by the Chief Collector Appraisement (South).

Tax Reform Commission (TRC), in its report, said the goods imported from China are under-invoiced or mis-declared to the tune of $3 billion, causing massive revenue losses to national exchequer.

Masood Naqvi, chairman at TRC said the true implementation of I-Form will stop the phenomenon of under-invoicing and mis-declaration.

Naqvi agreed to the argument of a positive impact on the import payments. “Imports will witness a decline due to implementation of I-Form.”

TRC chairman emphasised the need of growing information sharing between the SBP and Pakistan Customs to ensure genuine import payments.

Under the new procedure, all importers will be required to submit EIF request through their WeBOC’s user ID to any bank of their choice in Pakistan. 

The request for EIF will be submitted electronically by the importer and the bank will approve or reject EIF electronically in WeBOC. 

“The GD for import of goods cannot be filed with Pakistan Customs unless the approved EIF has been attached with a respective GD,” the SBP said.

Nadeem Kamil, general secretary at Karachi Customs Agents Association said the authorities have not launched any awareness campaign about the new procedure and traders are yet to get the user IDs.

Kamil said soon after the official launch of I-Form the country will have 7-8 holidays due to Eid-ul-Azha. “Since importers are not aware of the new system it will create mess and port congestion ahead of Eid,” he feared.