FBR tightens rules to check superfluous imports

KARACHI: The Federal Board of Revenue (FBR) has tightened its clearance regulations to check unnecessary imports that cause a spread in trade deficit, officials said on Thursday. 

The officials said the restriction on clearance of around 1,875 items was imposed considering the abnormal rise in imports. “Now, an individual would not be able to file goods declaration on his own for clearance of goods falling under 45 different categories of goods,” a Pakistan Customs official said.

“Instead, these items will only be cleared through goods declaration filed by a licenced customs agent.” The official said the restrictions will be applicable from October 20 and cover milk, vegetable and fruits, coffee and tea, cereals, meat products, confectionary items, chocolates, tobacco, perfumes, bathroom articles, kitchenware and ceramic items, suitcase and handbags articles, fabrics, carpet and blankets, readymade garments, shoes and home appliances.

Most of the items are imported from China with which Pakistan’s trade deficit sharply rose to $12.67 billion in 2016/17 from $4.032 billion in 2012/13. The country’s imports amounted to $14.13 billion and exports stood at $1.5 billion during the last fiscal year. Both the countries signed a free trade agreement in 2006.  The official said the objective is to discourage imports of unnecessary items and identify individuals who import such goods.

Pakistan’s imports surged to $53.02 billion in the fiscal 2016/17 as compared to $44.68 billion in the preceding fiscal, showing a growth of 18.67 percent. Annual trade deficit widened 36.32 percent. 

Higher imports pace of continued in the first quarter of the fiscal 2017/18 and surged 22.19 percent to $14.26 billion, while trade deficit widened 29.75 percent. The official said Pakistan Customs issued instructions regarding the decision to all the customs stations across the country.

The customs authority allows individual importers to file goods declaration alone on those items that are liable to duty and tax payments.  “This relaxation resulted in a massive increase of various products, especially retail products, which were already produced or manufactured locally,” the official added.

Besides, in most of the occasions the customs authorities were unable to identify an individual importer at the time of post clearance audit as their details were found fake.  “After the restriction, the customs clearing agent will be liable along with an importer for any violation,” the official said.