FBR seeks importers’ data to check money transfers

FBR seeks importers’ data to check money transfers
KARACHI: The Federal Board of Revenue (FBR) is gathering data of importers to check illegal transfer of money through payment for inward goods, official sources said on Monday.
The FBR is gathering data of importers who are getting clearing goods through clearing agents and by filing goods declarations on self basis, a senior FBR official said on the condition of anonymity.
The sources said the revenue authority had asked both the wings, Inland Revenue and Pakistan Customs, to provide details, while, the tax authorities would also ask the State Bank of Pakistan (SBP) and other banks to provide details of letters of credit (LCs) issued to importers.
As per the estimates, the gap between figures reported by the Customs Department and the central bank is around $4.5 billion, which should be reflected in the inflows of foreign direct investment. However, the inflows by various sectors as reported by the SBP were $2.6 billion for FY14, whereas the net foreign direct investment for the last fiscal year was $1.63 billion.
The sources said the FBR is intending to check banks withdrawals for making payments against opening of LCs and also how many payments were reported to the central bank, which was mandatory under the law.
Under the anti-money laundering and combating the financing of terrorism (AML/CFT) regulations for banks and development financial institutions (DFIs) issued by the SBP in September 2012, the financial institutions are bound to flag frequent and unusual advance payments against imports.
Some studies suggested the import value reported by the Customs authorities were also less than the actual imports.
A report of the commission constituted by the Supreme Court in Karachi law and order and smuggling of arms and ammunition case said: “All the under-invoiced imports (worth $3.59 billion as per the international trade statistics) are financed through illegal transfer.”
The report also said: “There was no institutionalisation between the Customs, Ministry of Commerce and LC or contract issuing banks for end-to-end monitoring of imported arms and ammunition.”
At the Customs stage, importers get cleared the goods either through their representatives such as Customs clearing agents or through filing goods declaration direct to WeBOC by creating accounts.
Sources in the Customs said any irregularity at the import stage could identify an importer, if goods declaration was filed through a clearing agent, a licensed person.
However in self goods declaration filed by importer it was difficult to apprehend in post-clearance due to various reasons, including fake identity.
Last month, the Karachi Customs Agents Association (KCAA) wrote a letter to the Customs authorities to check the goods declaration filed on self-basis and urged the authorities to issue rules for such transactions.
To give legal shelter for clearing on self-basis Section 208 was inducted to the Customs Act, 1969, subject to registration with the licensing authority of Pakistan Customs.
Khurram Ijaz, general secretary of KCCA, in the letter said when the law amended only 0.5 percent goods were declared on self-basis. However, he said, at present, the ratio of filing of self goods declaration is approximately 30 percent.
No rules have so far been notified for declaration on self-basis, which is discrimination to the Customs clearing agents. The KCAA demanded the self clearance should be discontinued till the notification of rules.
Sources in the Customs and a few clearing agents are unanimous that most of the illegal trade was cleared through self declaration with the connivance of the Customs officials and clearing agents.