Pakistan Customs unearths misdeclaration in imports

KARACHI: Pakistan Customs unearthed a number of import consignments that falsely classify consumer goods to evade duty and taxes, officials said on Saturday.

Officials said the department detected massive misdeclaration as importers presented finished goods in parts at the time of clearance to evade duty and taxes.

“We have intercepted several cases in which traders classified the imports as parts of products to escape the application of valuation rulings and get benefits of lower duty and tax rates,” an official at Model Customs Collectorate Appraisement – West said, requesting anonymity.

Officials said the importers were frequently mis-declaring consumer items, such as remote controls, electric rechargeable shavers and door locks.

Misdeclaration in imports renders billions of rupees in losses to national exchequer in a country whose annual imports amount to more than $50 billion.

Tax evasion in customs duty collection caused more than Rs78 billion in losses during the last fiscal year, the Auditor General of Pakistan (AGP) said in a report. The report mentioned a recovery of around Rs40 billion through auditing exercises.

AGP report 2016/17 also said the non-imposition of penalty led to a loss of an estimated Rs12 billion.

Government is struggling to contain widening fiscal deficit that reached to 5.8 percent or 1.864 trillion of gross domestic product during the last fiscal year.

Notwithstanding, the apex tax authority Federal Board of Revenue made a stride in revenue collection as it registered a 73 percent revenue growth during the last four years.

The customs authorities issued a warning to all the stations across the country to improve vigilance at the time of clearance of suspected items.

“All the field formation/assessment/examining officers should be vigilant, while examining the consignments of such products,” a notice to the customs stations said.

Customs also warned the examining and assessment staff that if any further

mis-declaration is reported then the officials would be

responsible for the lapse

and a punitive action would be initiated against them under the government servant rules.

Sources said the

authorities are also screening other consumer products, such as mobile phones to verify their compliance with the tax laws.